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Market development and food demand in rural China

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  • Huang, Jikun
  • Rozelle, Scott

Abstract

This paper seeks to understand how market imperfections affect the behavior of consumers in China's rural economy. A theoretical and empirical model is developed and estimated using a household-level data from six counties in Hebei Province. The results show that market development plays an important role in explaining food consumption behavior in China. As the market develops, farmers demand less grain and vegetables and consume more meat, fruit, and other food products after control for income and price effects. Moreover, the elasticities of demand also change as farm households begin to rely more on rural markets. The results of this paper suggest that a government concerned about the welfare of its rural population may want to be paying a more active role in fostering rural markets. Understanding the forces behind these consumption pattern shifts also will aid academics and policymakers in making better projections about future consumerneeds and price levels.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 9 (1998)
Issue (Month): 1 ()
Pages: 25-45

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Handle: RePEc:eee:chieco:v:9:y:1998:i:1:p:25-45

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References

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  1. Barten, Anton P, 1977. "The Systems of Consumer Demand Functions Approach: A Review," Econometrica, Econometric Society, vol. 45(1), pages 23-51, January.
  2. Peterson, E. Wesley F. & Jin, Lan & Ito, Shoichi, 1991. "An econometric analysis of rice consumption in the People's Republic of China," Agricultural Economics, Blackwell, vol. 6(1), pages 67-78, October.
  3. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  4. Udry, Christopher, 1990. "Credit Markets in Northern Nigeria: Credit as Insurance in a Rural Economy," World Bank Economic Review, World Bank Group, vol. 4(3), pages 251-69, September.
  5. Sicular, Terry, 1988. "Plan and Market in China's Agricultural Commerce," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 283-307, April.
  6. Peterson, E. Wesley F. & Jin, Lan & Ito, Shoichi, 1991. "An econometric analysis of rice consumption in the People's Republic of China," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 6(1), October.
  7. Wang, Zhi & Kinsey, Jean, 1994. "Consumption and saving behavior under strict and partial rationing," China Economic Review, Elsevier, vol. 5(1), pages 83-100.
  8. Huang, Jikun & David, Cristina C., 1993. "Demand for cereal grains in Asia: the effect of urbanization," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 8(2), February.
  9. Huang, Jikun & David, Cristina C., 1993. "Demand for cereal grains in Asia: The effect of urbanization," Agricultural Economics, Blackwell, vol. 8(2), pages 107-124, February.
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Citations

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Cited by:
  1. Fuller, Frank & Huang, Jikun & Ma, Hengyun & Rozelle, Scott, 2006. "Got milk? The rapid rise of China's dairy sector and its future prospects," Food Policy, Elsevier, vol. 31(3), pages 201-215, June.
  2. Chang, Min & Sumner, Daniel A., 2004. "Trade Impact On Food Security: Analysis On Farm Households In Rural China," 2004 Annual meeting, August 1-4, Denver, CO 20322, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Zhang, Xiaobo & Mount, Timothy D. & Boisvert, Richard N., 2001. "The Demand For Food Grain In China : New Insights Into A Controversy," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 30(1), April.
  4. Zhao, Jing & Thompson, Wyatt, 2013. "The Effect of Refrigerator Use on Meat Consumption in Rural China," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142931, Southern Agricultural Economics Association.
  5. Ma, Hengyun & Huang, Jikun & Rozelle, Scott & Rae, Allan N., 2003. "Livestock Product Consumption Patterns In Urban And Rural China," China Agriculture Project Working Papers 23689, Massey University, Centre for Applied Economics and Policy Studies.
  6. Ma, Hengyun & Rae, Allan N., 2004. "Projections of Dairy Product Consumption and Trade Opportunities in China," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 12.
  7. Curtis, Kynda R. & McCluskey, Jill J. & Wahl, Thomas I., 2007. "Consumer preferences for western-style convenience foods in China," China Economic Review, Elsevier, vol. 18(1), pages 1-14.
  8. Huang, Jikun & Bouis, Howarth, 2001. "Structural changes in the demand for food in Asia: empirical evidence from Taiwan," Agricultural Economics, Blackwell, vol. 26(1), pages 57-69, October.
  9. Dong, Fengxia & Fuller, Frank H., 2004. "Testing For Separability And Structural Change In Urban Chinese Food Demand," 2004 Annual meeting, August 1-4, Denver, CO 19923, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  10. Liu, Hongbo & Parton, Kevin A. & Cox, Rodney J., 2006. "Chinese consumer’s perceptions of beef," AFBM Journal, Australasian Farm Business Management Network, vol. 3(2).
  11. Zhuang, Renan & Abbott, Philip, 2007. "Price elasticities of key agricultural commodities in China," China Economic Review, Elsevier, vol. 18(2), pages 155-169.
  12. Zhuang, Renan & Abbott, Philip C., 2005. "Price Elasticities of Key Agricultural Commodities in China," 2005 Annual meeting, July 24-27, Providence, RI 19267, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  13. Curtis, Kynda R. & McCluskey, Jill J., 2004. "Impacts of the Westernization of Food Preferences on Medical Costs in China," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia 58399, Australian Agricultural and Resource Economics Society.
  14. Curtis, Kynda R. & McCluskey, Jill J. & Wahl, Thomas I., 2003. "Westernization In China: A Case Study In Processed Potatoes," 2003 Annual meeting, July 27-30, Montreal, Canada 22036, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  15. Ma, Hengyun & Oxley, Les, 2011. "Are China's energy markets cointegrated?," China Economic Review, Elsevier, vol. 22(3), pages 398-407, September.
  16. Xiao, Hongbo & Wang, Jimin & Oxley, Les & Ma, Hengyun, 2012. "The evolution of hog production and potential sources for future growth in China," Food Policy, Elsevier, vol. 37(4), pages 366-377.
  17. Junfei Bai & Caiping Zhang & Fangbin Qiao & Tom Wahl, 2012. "Disaggregating household expenditures on food away from home in Beijing by type of food facility and type of meal," China Agricultural Economic Review, Emerald Group Publishing, vol. 4(1), pages 18-35, February.

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