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The Demand for Food Grain in China: New Insights into a Controversy

Published online by Cambridge University Press:  15 September 2016

Xiaobo Zhang ,
Timothy D. Mount  and
Richard N. Boisvert
Xiaobo Zhang
Affiliation:
International Food Policy Research Institute in Washington, D.C.
Timothy D. Mount
Affiliation:
Department of Applied Economics and Management at Cornell University
Richard N. Boisvert
Affiliation:
Department of Applied Economics and Management at Cornell University
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Abstract

There is a substantial controversy in the economics literature over the magnitude of the expenditure elasticity for food grain in China that is caused, to a large extent, by whether time-series or cross-section data are used in the analysis. A set of reasonable elasticities for a complete demand system is estimated by using a panel of county level data in Guangdong Province for the last ten years. The results show that food grain has a small positive income elasticity, implying that food grain is not an inferior good in China. The reason that consumption per capita has not increased during a period of rapid economic growth in income is that the relative prices of the food and non-food substitutes for food grain have decreased.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 30 , Issue 1 , April 2001 , pp. 1 - 9
Copyright
Copyright © 2001 Northeastern Agricultural and Resource Economics Association 

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