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Modeling China's household food demand in the transition toward a market economy

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  • Wang, Qingbin

Abstract

Since 1978 China has moved gradually from a centrally planned to a mixed economic system of planning and markets. Under the new economic system consumers play more important role in determining China's food production and trade. Therefore, it is important for China's policymakers to understand household food demand because the effects of alternative food policies are conditioned by consumer demand. Information on China's food demand is also important for modeling the world food markets where China has been a major trader. Furthermore, China's long history of consumption rationing and gradual movement to a market economy provide a unique opportunity for studying consumer behavior in an economic transition;This study models China's household food demand in the transition toward a market economy. The major contributions of this study are: (1) a quantitative assessment of the changes in China's average food consumption and nutrient availability and sources through the compilation of annual food balance sheets during 1950 to 1991; (2) theoretical demand models for Chinese urban and rural households; (3) estimation of the associated demand models using the most recently available data; and (4) policy analysis based on the estimated demand models;The results from this study suggest four major conclusions: First, China's average dietary status changed modestly from 1950 to 1978 but has improved significantly since the 1978 economic reform. Second, China's household food consumption is in the transition from grains to animal products. The demand for animal products, and therefore feedgrains, in China is expected to increase at a significant rate. Third, with one-fifth of the world's population but only 7 percent of the earth's arable land, China is likely to be a major importer of wheat, barley, beans, and feedgrains. Fourth, government policy has been a key factor of the changes in China's household food consumption and dietary improvement since 1980 and will continue to play an important role in influencing China's household food consumption and international food trade.

Suggested Citation

  • Wang, Qingbin, 1994. "Modeling China's household food demand in the transition toward a market economy," ISU General Staff Papers 1994010108000011518, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:1994010108000011518
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    1. Lein-Lein Chen & John Devereux, 2017. "The Iron Rice Bowl: Chinese Living Standards 1952–1978," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 59(3), pages 261-310, September.

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