| Aspect |
Agent of Change |
Computation |
Workings |
Comment |
| 1. Initial Shock |
Slaughtering of livestock |
Constrain livestock gross output |
(see Response) |
Destruction of output |
| 2.Response (Ordinary) |
Reduction in output of livestock sectors |
a) Initial price increase because of constraint on livestock output |
Demand for livestock rationed by price |
Inherent substitution |
| |
Δ Consumer preferences |
b) Increase share of beef substitutes |
Substitution increases |
Adaptive substitution |
| |
Δ Import demand |
c) No additional step |
Substitution towards imports |
Inherent substitution |
| |
Δ Import preferences |
d) Increase share of beef imports |
More substitution towards imports |
Adaptive substitution |
| |
Δ Export demand |
e) No additional step |
Foreign demand for livestock rationed by price |
Inherent substitution |
| 3. Response (Fear) |
Δ Export demand |
a) Constrain livestock & meat export demand |
Reduces livestock exports |
Behavioral linkage |
| |
Δ Domestic demand |
b) Shift demand curve for beef downward |
Reduces price |
Behavioral linkage |
| 4.Remediation (deficit finance) |
Δ Final demand for remediation |
Increase government demand for Vet. & Remediation services |
Final demand increase financed by deficit |
Policy response |
| 5.Remediation (government expenditure offset) |
Δ Government final demand expenditures |
Change government expenditure distribution |
Shifts expenditure towards Veterinary & Remediation |
Budget/Policy response |
