The impact of avian influenza on the Korean egg market: Who benefited?

The historical decomposition and directed acyclic graph methods are employed to estimate the effect of avian influenza in Korea on egg price transmission between the farm, wholesale, and retail levels. Our findings suggest that farm and retail egg prices are connected by the wholesale price. We also find that the farm-wholesale and the wholesale-retail margins increase during the avian influenza period. Our results imply that the retailer and wholesaler use their market power to increase their price during the food safety crisis. Therefore, the Korean government should control market power by allowing more emergency egg imports.