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On Price Endogeneity in the Analysis of Food Demand in China

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  • Hovhannisyan, Vardges
  • Bozic, Marin
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    Abstract

    Price endogeneity has been ignored in previous analyses of food demand in China. We exploit farm price data collected from the China National Bureau of Statistics to account for price endogeneity using reduced form price equations. Applying our unique econometric approach to the analysis of provincial-level food demand in China, we find strong statistical evidence of price endogeneity. Models that ignore price endogeneity result in substantial upward biased estimates of future food demand in China.

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    File URL: http://purl.umn.edu/159771
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    Bibliographic Info

    Paper provided by University of Minnesota, Department of Applied Economics in its series Staff Papers with number 159771.

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    Date of creation: Nov 2013
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    Handle: RePEc:ags:umaesp:159771

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    Related research

    Keywords: Consumer welfare; expenditure endogeneity; food demand in China; Generalized Quadratic AIDS; price endogeneity; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Research Methods/ Statistical Methods;

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