Why Is Food Cheaper in Rich (European) Countries?
Relative to non-food items, food tends to be cheaper in rich, as compared with poor European countries. This tendency cannot be explained in terms of cost developments or foreign-trade considerations. A positive explanation proposed focuses on demand-income-supply interaction. An analysis of a cross-country price-augmented modification of Engel's Law, econometrically specified, indicates that the relative price of food is related positively to the supply of food items and negatively to that of non-food items. This finding is consistent with ¿agricultural price scissors' and also casts a different light on the nature of economic development and structural change.
|Length:||31 pages including 2 Tables and 6 Figures|
|Date of creation:||Oct 2005|
|Date of revision:|
|Publication status:||Published as wiiw Research Report|
|Contact details of provider:|| Postal: Rahlgasse 3, A-1060 Vienna|
Phone: (+43-1) 533 66 10
Fax: (+43-1) 533 66 10-50
Web page: http://www.wiiw.ac.at
More information through EDIRC
|Order Information:||Web: http://wiiw.ac.at|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- K.W. Clements & S. Selvanathan, 1992.
"Understanding Consumption Patterns,"
Economics Discussion / Working Papers
92-13, The University of Western Australia, Department of Economics.
- Syrquin, Moshe, 1988. "Patterns of structural change," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 7, pages 203-273 Elsevier.
- Leon Podkaminer, 2003.
"Analytical notes on the Balassa-Samuelson effect,"
Banca Nazionale del Lavoro Quarterly Review,
Banca Nazionale del Lavoro, vol. 56(226), pages 207-221.
- Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
- Irving B. Kravis & Robert E. Lipsey, 1982. "Towards an Explanation of National Price Levels," NBER Working Papers 1034, National Bureau of Economic Research, Inc.
- Clements, Kenneth W & Selvanathan, Antony & Selvanathan, Saroja, 1996.
"Applied Demand Analysis: A Survey,"
The Economic Record,
The Economic Society of Australia, vol. 72(216), pages 63-81, March.
When requesting a correction, please mention this item's handle: RePEc:wii:rpaper:rr:322. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Customer service)
If references are entirely missing, you can add them using this form.