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

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  • Gibson, John
  • Kim, Bonggeun

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 10% increase in the relative price of rice reduces household calorie consumption by less than 2% but this elasticity would be wrongly estimated to be more than twice as large if quality substitution is ignored.

Suggested Citation

  • Gibson, John & Kim, Bonggeun, 2013. "Quality, Quantity, and Nutritional Impacts of Rice Price Changes in Vietnam," World Development, Elsevier, vol. 43(C), pages 329-340.
  • Handle: RePEc:eee:wdevel:v:43:y:2013:i:c:p:329-340
    DOI: 10.1016/j.worlddev.2012.11.008
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    References listed on IDEAS

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    1. Deaton, Angus, 1990. "Price elasticities from survey data : Extensions and Indonesian results," Journal of Econometrics, Elsevier, vol. 44(3), pages 281-309, June.
    2. 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.
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    4. 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.
    5. Gibson, John & Kim, Bonggeun, 2013. "Do the urban poor face higher food prices? Evidence from Vietnam," Food Policy, Elsevier, vol. 41(C), pages 193-203.
    6. 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. 0(Number 1), pages 1-14, April.
    7. 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.
    8. McKelvey, Christopher, 2011. "Price, unit value, and quality demanded," Journal of Development Economics, Elsevier, vol. 95(2), pages 157-169, July.
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    10. 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, August.
    11. 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.
    12. Tom Slayton, 2009. "Rice Crisis Forensics: How Asian Governments Carelessly Set the World Rice Market on Fire," Working Papers 163, Center for Global Development.
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    15. 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.
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    Citations

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    Cited by:

    1. Elleby, Christian, 2014. "Poverty and Price Transmission," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182722, European Association of Agricultural Economists.
    2. John Creedy, 2016. "Sugar Taxes and Changes in Total Calorie Consumption: A Simple Framework," Treasury Working Paper Series 16/06, New Zealand Treasury.
    3. Andalón, Mabel & Gibson, John, 2017. "The 'Soda Tax' is Unlikely to Make Mexicans Lighter: New Evidence on Biases in Elasticities of Demand for Soda," IZA Discussion Papers 10765, Institute for the Study of Labor (IZA).
    4. Andalón, Mabel & Gibson, John, 2018. "The ‘soda tax’ is unlikely to make Mexicans lighter or healthier: New evidence on biases in elasticities of demand for soda," MPRA Paper 86370, University Library of Munich, Germany.
    5. John Gibson & Bonggeun Kim, 2017. "30 Years of Being Wrong: A Systematic Review and Critical Test of the Cox and Wohlgenant Approach to Quality-Adjusted Prices in Demand Analysis," Working Papers in Economics 17/16, University of Waikato.
    6. John Gibson & Bonggeun Kim, 2016. "Quality, Quantity and Spatial Variation of Price: Back to the Bog," Working Papers in Economics 16/10, University of Waikato.
    7. Lohmann, Steffen & Lechtenfeld, Tobias, 2015. "The Effect of Drought on Health Outcomes and Health Expenditures in Rural Vietnam," World Development, Elsevier, vol. 72(C), pages 432-448.
    8. repec:eee:energy:v:140:y:2017:i:p1:p:415-425 is not listed on IDEAS
    9. repec:bla:asiaps:v:4:y:2017:i:3:p:405-416 is not listed on IDEAS
    10. Cororaton, Caesar B. & Knight, David S., 2014. "The impact of exogenous shocks on households in the Pacific : a micro-simulation analysis," Policy Research Working Paper Series 7046, The World Bank.
    11. Ivanic, Maros & Martin, Will, 2014. "Short- and long-run impacts of food price changes on poverty," Policy Research Working Paper Series 7011, The World Bank.
    12. John Gibson & Alessandro Romeo, 2017. "Fiscal-Food Policies are Likely Misinformed by Biased Price Elasticities from Household Surveys: Evidence from Melanesia," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 4(3), pages 405-416, September.
    13. John Gibson & Trinh Le, 2018. "Improved Modelling of Spatial Cost of Living Differences in Developing Countries: A Comparison of Expert Knowledge and Traditional Price Surveys," Working Papers in Economics 18/08, University of Waikato.

    More about this item

    Keywords

    demand; nutrition; rice; prices; Vietnam; Asia;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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