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Food Standards and Welfare: General Equilibrium Effects

Author

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  • Tao Xiang
  • Jikun Huang
  • d’Artis Kancs
  • Scott Rozelle
  • Jo Swinnen

Abstract

We develop a general equilibrium households model to analyze the effects of high standards food chains taking seriously into account market imperfections. To measure structural production changes and welfare effects on rural and urban households, our model has two types of agents, five kinds of products and four types of factors. We calibrate the model using dataset from China and do simulations through three ways: increasing world price of high standards food, increasing urban households’ preference for high standards food, and relaxing credit constraints on high standards food production. The simulation results show that how poor households are affected depends on the nature of the shocks leading to the expansion of high standards sector and the market imperfections, and whether the poor can gain through the labor market if they are excluded from high standards farming.
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  • Tao Xiang & Jikun Huang & d’Artis Kancs & Scott Rozelle & Jo Swinnen, 2012. "Food Standards and Welfare: General Equilibrium Effects," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(2), pages 223-244, June.
    • Handle: RePEc:bla:jageco:v:63:y:2012:i:2:p:223-244
    DOI: j.1477-9552.2012.00334.x
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    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • Y80 - Miscellaneous Categories - - Related Disciplines - - - Related Disciplines

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