North Korean Food Supply And Demand: An Econometric Analysis

This study simulates North Korean food supply and demand using an econometric regression based upon neo-classical economic theory. In doing so, this study at first describes the autarky condition that exists in the closed economy of North Korea and the relationship between pro-military oriented economic policy and deficiency in the dietary needs required by the average North Korean. This study then quantifies the impact agricultural resources and policy have had on the production of food for the sample period of 1995 to 2008. Results show that food production decreases along with a decrease in agricultural input factors and with the implementation of a more pro-military oriented economic policy. Finally, this study simulates ex ante food balance. In order to meet food demand, the rate at which agricultural input factors are made available should be much more greater than the increasing rate of population, regardless of whether pro-market oriented economic policy reforms are implemented or not. And if a more pro-market approach is implemented by North Korea, the food balance appears to recover more quickly from food deficiency to food surplus given a specific level of agricultural resources.