Impact of live hog futures listing on pork price fluctuations in China: a Difference-in-Differences (DiD) analysis

Purpose This study examines how the listing of live hog futures influences the volatility of pork prices in China, given the sector's importance to the national economy, public welfare, and the central role of pork in the Chinese diet. Design/methodology/approach We employ a Difference-in-Differences (DiD) model to analyze the impact of live hog futures listing on pork price fluctuations. National macro-data and micro-data from key live hog-producing and consuming provinces over a six-year period from January 8, 2018, to January 8, 2024, are assessed. Findings The results indicate that the introduction of live hog futures has a stabilizing effect on pork price volatility across the nation and in major live hog-producing provinces, while exhibiting an amplifying effect on volatility in major live hog-consuming provinces. This suggests that the live hog futures market plays a stabilizing role in national and producer provincial markets but may contribute to increased volatility in consumer provincial markets. Originality/value This paper contributes by adopting a new research perspective in this paper. It treats the listing of live hog futures as a policy and uses the policy evaluation Difference-in-Difference method for empirical exploration. It also provides a basis for policymakers and market participants.