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Chinese domestic textile demand: where they buy does matter

Author

Listed:
  • Stephen MacDonald
  • Suwen Pan
  • Darren Hudson
  • Francis Tuan

Abstract

Purpose - The purpose of this paper is to examine the effects of distribution channels on demand for apparel, home textiles, and other textiles (including shoes) in urban China. Design/methodology/approach - The estimation procedure used in this study is implemented in three steps: first, the price/unit value information is estimated; second, the parameters for a set of demand systems are estimated; and third, the J‐test and likelihood ratio testing are used to determine the most suitable model for the data set. Findings - The results indicate that households spend more on apparel than home textiles and other textile products if they purchase textile products from small stores. It also indicates that they would spend more on home textiles and other textiles if they purchase from chain stores and supermarkets. Originality/value - The estimation of Chinese textile consumption presents a significant challenge to both academic researchers and industry, due to China's large population, income inequality, different consumption channels, and other related issues. First, the results presented in the paper provide a clear indication for textile producers, exporters, and others to choose their distribution channels to target specific customers; second, the disaggregated textile expenditure and price elasticity estimates from this article can be used in various analytical procedures (i.e. simulation models) to evaluate the welfare effects of domestic policies and international trade policies. Quantification of the welfare impacts of domestic policies and international trade policies would be more meaningful if disaggregate textile elasticity estimates are used in simulation models.

Suggested Citation

  • Stephen MacDonald & Suwen Pan & Darren Hudson & Francis Tuan, 2013. "Chinese domestic textile demand: where they buy does matter," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 5(3), pages 312-327, August.
    • Handle: RePEc:eme:caerpp:v:5:y:2013:i:3:p:312-327
    DOI: 10.1108/CAER-12-2011-0165
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    References listed on IDEAS

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    1. Cheng Fang & Bruce A. Babcock, 2003. "China's Cotton Policy and the Impact of China's WTO Accession and Bt Cotton Adoption on the Chinese and U.S. Cotton Sectors," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 03-wp322, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    3. Deaton, Angus, 1988. "Quality, Quantity, and Spatial Variation of Price," American Economic Review, American Economic Association, vol. 78(3), pages 418-430, June.
    4. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    5. repec:pri:rpdevs:deaton_tarozzi_prices_poverty is not listed on IDEAS
    6. Pollak, Robert A & Wales, Terence J, 1978. "Estimation of Complete Demand Systems from Household Budget Data: The Linear and Quadratic Expenditure Systems," American Economic Review, American Economic Association, vol. 68(3), pages 348-359, June.
    7. repec:pri:rpdevs:deaton_tarozzi_prices_poverty.pdf is not listed on IDEAS
    8. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
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    Cited by:

    1. Stephen Macdonald & Suwen Pan & Darren Hudson & Francis Tuan, 2014. "Toward a consumer economy in China: implications of changing wage policies for U.S. cotton exports," Agricultural Economics, International Association of Agricultural Economists, vol. 45(4), pages 513-524, July.
    2. Xu, Bin & Lin, Boqiang, 2016. "Reducing CO2 emissions in China's manufacturing industry: Evidence from nonparametric additive regression models," Energy, Elsevier, vol. 101(C), pages 161-173.
    3. Khurram SHAHZAD* & Muhammad Nadeem SARWAR**, 2018. "Analysis of Food Demand Patterns of Sindh Province, Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 28(1), pages 147-168.

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