| Abstract |
Beginning January 1, 2030, South Korea will mandate group housing for sows in the domestic
hog production. The purpose of this article is to examine the economic implications of the new
sow housing regulations on the hog and pork industry in South Korea. This article developes an
economic simulation model to quantify the regulation impacts within a calibrated equilibrium
framework. With three scenarios differentiated by the regulation costs in production, the simulated
outcomes indicate that the regulations will result in a 2% to 11% increase in hog prices, a 1%
to 5% decrease in domestic hog quantities, and a 0.5% to 3% decrease in hog producer surplus
in South Korea. An increase of 10% in the willingness to pay for domestic pork would be
sufficient to offset the loss in producer surplus caused by the regulations, in the scenario with
relatively high incremental regulation costs of production.
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