The asymmetric price effects on food demand and nutrient intake of rural low-income households in China

PurposeThis paper aims to examine the asymmetric effects of price increases and decreases on the food demand and nutrient intake of rural households, especially low-income households.Design/methodology/approachWith household pooled cross-sectional data from 2018–2020 in rural China, the price elasticities of demand for food and nutrients are estimated via the almost ideal demand system (AIDS) with reference prices, and then a simulation is undertaken based on the estimated elasticities.FindingsThe price elasticities of demand for food and nutrients show significant asymmetric responses to price increases and declines. Food demand is more sensitive to price decreases than to increases, which is more obvious for other households than for the low-income group. This asymmetric pattern may be dominated by stockpiling behaviors. Stockpiling helps households amplify the benefits of reducing food prices. Moreover, nutrient elasticities indicate that nutrient intake is more sensitive to price increases due to substitution between foods. The simulation results suggest that changes in food prices increase the gap in food consumption and nutrient intake between lower- and higher-income classes in rural China.Practical implicationsThis study offers insights into preventing nutritional poverty and improving diet in terms of food prices.Originality/valueWe estimate the asymmetric price elasticity of food demand in rural China via AIDS with reference prices, which corrects the systematic error in elasticities estimated by traditional demand system models. The vulnerability of low-income households to price fluctuations and stockpiling behaviors is revealed in rural China.