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Quality, Quantity and Nutritional Impact of Rice Price Changes in Vietnam

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  • John Gibson

    ()
    (University of Waikato)

  • Bonggeun Kim

    (Seoul National University)

Abstract

Asian governments intervene in the world rice market to protect domestic consumers. Whether consumers are nutritionally vulnerable depends on the elasticity of calories with respect to rice prices. Common demand models applied to household survey and market price data ignore quality substitution and force all adjustment onto the quantity (calorie) margin. This paper uses data from Vietnam on market prices, food quantity and quality. A ten percent increase in the relative price of rice reduces household calorie consumption by less than two percent but this elasticity would be wrongly estimated to be more than twice as large if quality substitution is ignored.

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File URL: ftp://mngt.waikato.ac.nz/RePEc/wai/econwp/1116.pdf
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Bibliographic Info

Paper provided by University of Waikato, Department of Economics in its series Working Papers in Economics with number 11/16.

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Length: 20 pages
Date of creation: 31 Dec 2011
Date of revision:
Handle: RePEc:wai:econwp:11/16

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Keywords: demand; nutrition; rice; prices; Vietnam; Asia;

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  1. Gibson, John & Kim, Bonggeun, 2013. "Testing Hicksian Separability Over Space," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150387, Agricultural and Applied Economics Association.
  2. John Gibson & Bonggeun Kim, 2012. "Do the Urban Poor Face Higher Food Prices? Evidence from Vietnam," Working Papers in Economics 12/16, University of Waikato, Department of Economics.
  3. Vu, Linh & Glewwe, Paul, 2011. "Impacts of Rising Food Prices on Poverty and Welfare in Vietnam," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(1), April.
  4. John Gibson & Scott Rozelle, 2011. "The effects of price on household demand for food and calories in poor countries: are our databases giving reliable estimates?," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 4021-4031.
  5. Maros Ivanic & Will Martin, 2008. "Implications of higher global food prices for poverty in low-income countries-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 405-416, November.
  6. Dessus, Sebastien & Herrera, Santiago & de Hoyos, Rafael, 2008. "The impact of food inflation on urban poverty and its monetary cost : some back-of-the-envelope calculations," Policy Research Working Paper Series 4666, The World Bank.
  7. Tom Slayton, 2009. "Rice Crisis Forensics: How Asian Governments Carelessly Set the World Rice Market on Fire," Working Papers 163, Center for Global Development.
  8. Rafael E. de Hoyos & Denis Medvedev, 2011. "Poverty Effects of Higher Food Prices: A Global Perspective," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 387-402, 08.
  9. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  10. Ivanic, Maros & Martin, Will, 2008. "Implications of higher global food prices for poverty in low-income countries," Policy Research Working Paper Series 4594, The World Bank.
  11. Deaton, A., 1988. "Price Elasticities From Survey Data: Extensions And Indonesian Results," Papers 138, Princeton, Woodrow Wilson School - Development Studies.
  12. Minten, Bart & Kyle, Steven, 1999. "The effect of distance and road quality on food collection, marketing margins, and traders' wages: evidence from the former Zaire," Journal of Development Economics, Elsevier, vol. 60(2), pages 467-495, December.
  13. Bruce W. Hamilton, 2001. "Using Engel's Law to Estimate CPI Bias," American Economic Review, American Economic Association, vol. 91(3), pages 619-630, June.
  14. McKelvey, Christopher, 2011. "Price, unit value, and quality demanded," Journal of Development Economics, Elsevier, vol. 95(2), pages 157-169, July.
  15. Peter Timmer, 2009. "Rice Price Formation in the Short Run and the Long Run: The Role of Market Structure in Explaining Volatility," Working Papers 172, Center for Global Development.
  16. Behrman, Jere R & Deolalikar, Anil B & Wolfe, Barbara L, 1988. "Nutrients: Impacts and Determinants," World Bank Economic Review, World Bank Group, vol. 2(3), pages 299-320, September.
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