Why Is Food Cheaper in Rich (European) Countries?
AbstractRelative to non-food items, food tends to be cheaper in rich, as compared with poor European countries. This tendency cannot be explained in terms of cost developments or foreign-trade considerations. A positive explanation proposed focuses on demand-income-supply interaction. An analysis of a cross-country price-augmented modification of Engel's Law, econometrically specified, indicates that the relative price of food is related positively to the supply of food items and negatively to that of non-food items. This finding is consistent with ¿agricultural price scissors' and also casts a different light on the nature of economic development and structural change.
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Bibliographic InfoPaper provided by The Vienna Institute for International Economic Studies, wiiw in its series wiiw Research Reports with number 322.
Length: 31 pages including 2 Tables and 6 Figures
Date of creation: Oct 2005
Date of revision:
Publication status: Published as wiiw Research Report
Find related papers by JEL classification:
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