Assessing the Impact of External Shocks on Prices in the Live Pig Industry Chain: Evidence from China

Dapeng Zhou, Jing Zhang, Honghua Huan (), Nanyan Hu, Yinqiu Li and Jinhua Cheng
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Dapeng Zhou: Jiangsu Academy of Agricultural Sciences, Nanjing 210014, China
Jing Zhang: College of Economics and Management, China Agricultural University, Beijing 100083, China
Honghua Huan: Jiangsu Academy of Agricultural Sciences, Nanjing 210014, China
Nanyan Hu: College of Economics and Management, China Agricultural University, Beijing 100083, China
Yinqiu Li: Jiangsu Academy of Agricultural Sciences, Nanjing 210014, China
Jinhua Cheng: Jiangsu Academy of Agricultural Sciences, Nanjing 210014, China

Sustainability, 2025, vol. 17, issue 5, 1-28

Abstract: Analyzing the influence of external shocks on the pricing dynamics of the live pig industry chain is essential for effective macroeconomic control. Utilizing monthly data spanning from January 2010 to August 2023, this study employs the TVP-SV-VAR (Time-Varying Parameter—Stochastic Volatility—Vector Autoregression) model to analyze the effects of EPU (Economic Policy Uncertainty) and INU (Live Pig Industry News Uncertainty) on industry pricing. The findings are as follows: Firstly, the impacts of EPU and INU on industry prices exhibit time variability and distinct characteristics. Specifically, the impact magnitude of EPU ranges between [−0.025, 0.025], and that of INU between [−0.01, 0.01]. These differences in impact magnitude elicit varied responses from manufacturers and consumers to the indices. Secondly, uncertainty shocks at particular time points show high consistency, suggesting a patterned influence of external shocks on industry pricing that aligns with historical trends. Thirdly, robustness tests with alternative explanatory variables confirm the reliability of the findings. An uncertainty index, crafted from more comprehensive information sources, more accurately captures the effects of external shocks on industry pricing. Additionally, the volume of live pig slaughters illustrates the potential interaction between external shocks and pricing dynamics. In an era marked by increasingly frequent external shocks, this research offers valuable insights for policymakers to implement macro-control and foster high-quality industrial development.

Keywords: external shock; economic policy uncertainty; industrial news uncertainty; pig industry chain (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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