Market development and food demand in rural China
Date
1995-06
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Publisher
International Food Policy Research Institute, Washington, DC, US
Abstract
This paper seeks to understand how market imperfections affect the behavior
of consumers in China's rural economy. A theoretical and empirical model is
developed and estimated using a household-level data from six counties in Hebei
Province. The results show that market development plays an important role in
explaining food consumption behavior in China. As the market develops, farmers
demand less grain and vegetables and consume more meat, fruit, and other food
products after control for income and price effects. Moreover, the elasticities of
demand also change as farm households begin to rely more on rural markets. The
results of this paper suggest that a government concerned about the welfare of its
rural population may want to be paying a more active role in fostering rural markets.
Understanding the forces behind these consumption pattern shifts also will aid
academics and policymakers in making better projections about future consumer
needs and price levels.
Description
Also published in the China Economic Review, v. 9, issue 1, p. 25-45, Spring 1998 (doi:10.1016/S1043-951X(99)80002-9)
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IDRC Final Report
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