Avian Influenza, Public Opinion, and Risk Spillover: Measurement, Theory, and Evidence from China’s Broiler Market

• Main Authors: Lan Yi, Jianping Tao, Caifeng Tan, Zhongkun Zhu
• Format: Article
• Language: English
• Published: MDPI AG 2019-04-01
• Series: Sustainability
• Subjects: avian influenza; public opinion; price risk; spatial spillover; sustainability of global broiler market; limited attention; two-step flow of communication; infection cases; Baidu search volume; Google search volume
• Online Access: https://www.mdpi.com/2071-1050/11/8/2358

Animal disease is a major threat to the sustainability of the global livestock market. We explore the price risk spillover of avian influenza to the broiler market, from the perspective of public opinion. Unlike in previous work, where avian influenza is measured as a whole, we decompose an avian influenza epidemic into avian influenza outbreak and public opinion, measured by infection cases and Baidu and Google search volume. Theoretically, by introducing the theory of limited attention and two-step flow of communication, we develop an analytical framework to capture the causal mechanism of avian influenza outbreak, public opinion, and broiler price risk spillover, arguing that it is actually public opinion, not avian influenza outbreak alone, that directly causes broiler price risk. Empirically, using a long panel from China spanning from November 2004–November 2017, we examine the causal mechanism and analyse the nonlinear spatial spillover of public opinion to broiler price risk. We find that: (i) neither poultry nor human infection with avian influenza outbreak has a significant spillover to broiler price; (ii) on average, public opinion has a negative spillover to broiler price; in general, spillover of public opinion to broiler price is inverse U-shaped; (iii) on average, public opinion has a negative direct effect on local broiler price and a three times larger negative spatial spillover effect on nearby broiler price; in general, direct and spatial spillover effects are inverse U-shaped. Our research highlights the importance of studying public opinion in amplifying price risk when analysing spillover of animal disease to the global livestock market.