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Abstract

Pork market, as one of the most important food markets in China, is frequently exposed to food scare events such as Porcine Reproductive & Respiratory Syndrome (PRRS), Swine Influenza (SI), and Classical Swine Fever (CSF). This research first investigates the impact of food scare incidents on pork market in China with a theoretical framework, proving that if there is no market power, farm-retail price spread should be a function of marketing cost only. Using monthly data of pork retail price and pork producer price from 2001 to 2014, empirical analysis provides evidence that food scare events significantly influence both pork retail price and farm-retail price spread, indicating the existence of market power in Chinese pork market as well as the differential impact of food scares on retailers and producers.

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