Estimating Structural Change in the Japanese Beef Import Market in the Wake of BSE: A Smooth Transition Approach

We assess the effect of bovine spongiform encephalopathy (BSE) on Japanese beef imports from the United States and competing suppliers. Using a source-differentiated almost ideal demand system of beef imports with endogenous smooth transition functions, we find that a nonlinear structural change has occurred in the Japanese beef import market in the wake of BSE. The BSE outbreaks led an instantaneous, persistent impact on Japanese beef imports lasting over a decade, causing a significant shift in Japanese consumer preferences for beef imports from different origins. Over half of the estimated expenditure, own-price, and cross-price elasticities have changed in the aftermath of BSE, and some have not returned to their pre-BSE levels even after the trade recovery period.
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Ning, Xin ; Grant, Jason H. ; Peterson, Everett B., Estimating Structural Change in the Japanese Beef Import Market in the Wake of BSE: A Smooth Transition Approach, Journal of Agricultural and Resource Economics, Volume 47, Issue 1, January 2022, Pages 97-113

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