The study analyzes the dynamic differences between the prices of black hogs and white hogs in Taiwan and determines whether these two products should be viewed as homogeneous commodities by analyzing their price volatility. Previous studies have shown that the differences in auction prices stem from the traits of the individual hogs rather than certain breeds demanding a premium because of their superior meat quality. Methodologically, this study utilizes the multivariate GARCH and the constant conditional correlation models to analyze the average daily prices of the two breeds generated by random auction sequences. Data were collected from 1485 observations, from January 2009 to December 2013, of the Miaoli hog auction market of Taiwan. Based on the dissimilarity of price volatility structures and the low correlation factor between the black hogs and white hogs, this study concludes that these two hog breeds should be regarded as heterogeneous products. This conclusion should serve as a reference for the local hog producers when searching for the best economic traits of indigenous breeds in terms of rearing the potential as well as for the stakeholders when developing the breed-specific marketing strategies.
Apergis N. (2003): Agricultural price volatility spillover effects: the case of Greece. European Review of Agriculture Economics, 30, 389-406 https://doi.org/10.1093/erae/30.3.389
Aslam Mubeen M. (2006): Are You Selling the Right Colour? A Cross‐cultural Review of Colour as a Marketing Cue. Journal of Marketing Communications, 12, 15-30 https://doi.org/10.1080/13527260500247827
Baltagi Badi H., Griffin James M., Xiong Weiwen (2000): To Pool or Not to Pool: Homogeneous Versus Heterogeneous Estimators Applied to Cigarette Demand. Review of Economics and Statistics, 82, 117-126 https://doi.org/10.1162/003465300558551
Bauwens Luc, Laurent Sébastien, Rombouts Jeroen V. K. (2006): Multivariate GARCH models: a survey. Journal of Applied Econometrics, 21, 79-109 https://doi.org/10.1002/jae.842
Buguk C., Hudson D., Hanson T. (2003): Price volatility spillover in agricultural markets: an examination of U.S. catfish markets. Journal of Agricultural and Resource Economics, 28: 86–99.
Chang J.B., Lusk J.L., Norwood F.B. (2010): The price of happy hens: a hedonic analysis of retail egg prices. Journal of Agricultural and Resource Economics, 35: 406–423.
Chung C., Briggeman B.C., Han S. (2012): Willingness-to-pay for beef quality attributes: a latent segmentation analysis of Korean grocery shoppers. Journal of Agricultural and Applied Economics, 44: 447–459.
Coatney K.T., Shaffer S.L., Menkhaus D.J. (2012): Auction prices, market share, and a common agent. Journal of Economic Behavior & Organization, 81: 61–73.
Engelbrecht-Wiggans Richard (1994): Sequential auctions of stochastically equivalent objects. Economics Letters, 44, 87-90 https://doi.org/10.1016/0165-1765(93)00327-K
Engle Robert F., Kroner Kenneth F. (1995): Multivariate Simultaneous Generalized ARCH. Econometric Theory, 11, 122- https://doi.org/10.1017/S0266466600009063
Engle R. (2002): Dynamic conditional correlation: a simple class of multivariate generalized autoregressive conditional heteroskedasticity models. Journal of Business & Economic Statistics, 20: 339–350.
Gandemer G., Viau Michèle, Caritez J.C., Legault C. (1992): Lipid composition of adipose tissue and muscle in pigs with an increasing proportion of Meishan genes. Meat Science, 32, 105-121 https://doi.org/10.1016/0309-1740(92)90020-5
Haigh Michael S., Bryant Henry L. (2001): The effect of barge and ocean freight price volatility in international grain markets. Agricultural Economics, 25, 41-58 https://doi.org/10.1111/j.1574-0862.2001.tb00234.x
Holt Matthew T., Aradhyula Satheesh V. (1990): Price Risk in Supply Equations: An Application of GARCH Time-Series Models to the U. S. Broiler Market. Southern Economic Journal, 57, 230- https://doi.org/10.2307/1060492
Hu P.S. (2010, February 24). Miaoli pork: auctions of black hog in Taiwan. The United Daily News, Feb. 24, 2010: PP. B2 (in Chinese).
Hudson D., Ethridge D., Segarra E. (1998): Incorrect Price Information for a Heterogeneous Commodity: A Conceptual Synthesis. Applied Economic Perspectives and Policy, 20, 365-376 https://doi.org/10.2307/1349995
Jeitschko Thomas D (1999): Equilibrium price paths in sequential auctions with stochastic supply. Economics Letters, 64, 67-72 https://doi.org/10.1016/S0165-1765(99)00066-X
Kwiatkowski D.P., Phillips C.B., Schmidt P., Shin Y. (1992): Testing the null hypothesis of stationarity against the alternative of a unit root: how sure are we that economic time series have a unit root? Journal of Econometrics, 54: 159–178.
Latorre M.A., Pomar C., Faucitano L., Gariépy C., Méthot S. (2008): The relationship within and between production performance and meat quality characteristics in pigs from three different genetic lines. Livestock Science, 115, 258-267 https://doi.org/10.1016/j.livsci.2007.08.013
Li Hong, Majerowska Ewa (2008): Testing stock market linkages for Poland and Hungary: A multivariate GARCH approach. Research in International Business and Finance, 22, 247-266 https://doi.org/10.1016/j.ribaf.2007.06.001
Li H., Hsiao C., Hsieh C. (2011): Econometrics. Tung Hua Book Co, Taipei.
Lü H. (2010a): An analysis of factors and correlation tests affecting traditional market consumer purchases of black hog pork. Bank of Taiwan Quarterly, 61: 137–159.
Lü H. (2010b): The influence of the supermarket on consumer purchase of pork – an analysis of factors and correlation tests. Bank of Taiwan Quarterly, 61: 130–154.
Melton B.E., Huffman W.E., Shogren J.F. (1996a): Economic values of pork attributes: hedonic price analysis of experimental auction data. Review of Agricultural Economics, 18: 613–627.
Melton B.E., Huffman W.E., Shogren J.F., Fox J.A. (1996b): Consumer preferences for fresh food items with multiple quality attributes: evidence from an experimental auction of pork chops. American Journal of Agricultural Economics, 78: 916–923.
Mintert J., Blair J., Schroeder T., Brazle F. (1990): Analysis of factors affecting cow auction price differentials. Southern Journal of Agricultural Economics, 22: 23–30.
Moskowitz Howard R. (1995): Food quality: Conceptual and sensory aspects. Food Quality and Preference, 6, 157-162 https://doi.org/10.1016/0950-3293(94)00030-Y
Natcher D., Weaver R. (1999): The transmission of price volatility in the beef market: a multivariate approach. In: American Agricultural Economics Association annual meetings, Nashville, TN, August 1999.
National Animal Industry Foundation (2008): 2008 Taiwan Pig Production Statistics. Taipei, National Animal Industry Foundation.
Ngapo Tania M., Gariépy Claude (2008): Factors Affecting the Eating Quality of Pork. Critical Reviews in Food Science and Nutrition, 48, 599-633 https://doi.org/10.1080/10408390701558126
Oglend A., Sikveland M. (2008): The behaviour of salmon price volatility. Marine Resource Economics, 23: 507–526.
Onour I.A., Sergi B.S. (2011): Modeling and forecasting volatility in the global food commodity prices. Agricultural Economics – Czech, 57: 132–139.
Rezitis A.N., Stavropoulos K.S. (2011): Price transmission and volatility in the Greek broiler sector: a threshold co-integration analysis. Journal of Agricultural & Food Industrial Organization, 9: article 8.
Rezitis A. N., Stavropoulos K. S. (): Greek meat supply response and price volatility in a rational expectations framework: a multivariate GARCH approach. European Review of Agricultural Economics, 39, 309-333 https://doi.org/10.1093/erae/jbr038
Ruto Eric, Garrod Guy, Scarpa Riccardo (2008): Valuing animal genetic resources: a choice modeling application to indigenous cattle in Kenya. Agricultural Economics, 38, 89-98 https://doi.org/10.1111/j.1574-0862.2007.00284.x
Saengwong S., Jatuporn C., Roan S.W. (2011): Modeling time series analysis between feedstuff and hog prices in Taiwan. Journal of Agricultural Science and Technology A, 1: 1126–1129.
Sanders D.R., Moon W., Kuethe T. (2007): Consumer willingness-to-pay for fresh pork attributes. Journal of Agribusiness, 25: 163–179.
Serra T., Gil J.M. (2013): Price volatility in food markets: can stock building mitigate price fluctuations? European Review of Agricultural Economics, 40: 507–528.
Steine G., Alfnes F., Rora M.B. (2005): The effect of color on consumer WTP for farmed salmon. Marine Resource Economics, 20: 211–219.
Tienhaara A., Ahtiainen H., Pouta E. (2013): Consumers as conservers – could consumers’ interest in a specialty helps to preserve endangered finncattle? Agroecology and Sustainable Food Systems, 37: 1017–1039.
Touraille C., Monin G., Legault C. (1989): Eating quality of meat from European × Chinese crossbred pigs. Meat Science, 25, 177-186 https://doi.org/10.1016/0309-1740(89)90070-3
Wahl Thomas I., Shi Hongqi, Mittelhammer Ron C. (1995): A hedonic price analysis of quality characteristics of Japanese wagyu beef. Agribusiness, 11, 35-44 https://doi.org/10.1002/1520-6297(199501/02)11:1<35::AID-AGR2720110105>3.0.CO;2-N
Walburger Allan M. (2002): Estimating the Implicit Prices of Beef Cattle Attributes: A Case from Alberta. Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, 50, 135-149 https://doi.org/10.1111/j.1744-7976.2002.tb00424.x
Worthington Andrew, Kay-Spratley Adam, Higgs Helen (2005): Transmission of prices and price volatility in Australian electricity spot markets: a multivariate GARCH analysis. Energy Economics, 27, 337-350 https://doi.org/10.1016/j.eneco.2003.11.002
Wu H.S., Lo L.L., Lin H.S. (2007): Comparison of white hair and black hair pigs on carcass and meat quality traits. Hwa Kang Journal of Agriculture, 19: 17–32 (in Chinese).
Yen N.T. (1998): Breeding Black Hog Strains in Taiwan. In: 40th Anniversary Livestock Breeding Symposium, Taiwan Province Livestock Research Institute.
Yen N. T., Tai C., Cheng Y. S., Huang M. C. (2001): Relative Genetic Effects of Duroc and Taoyuan Breeds on the Economic Traits of Their Hybrids. Asian-Australasian Journal of Animal Sciences, 14, 447-454 https://doi.org/10.5713/ajas.2001.447