An analysis of structure change of food demand in China

Abstract

The estimation of consumer demand is playing an important role in applied econometrics. Chinese food demand has fundamentally changed as the result of growing income and urbanization ever since the economic reform in 1978. Although food demand of the western countries has been widely studied in the literature, the study of demand in the developing countries like China has been much ignored. In this study, we aim at analyzing structure changes of food demands in China. We intend to estimate Chinese household consumer demand for five food categories at a regional level by applying the Rotterdam model, Almost Ideal Demand System (AIDS), and the CBS model and we use a 17-year period household survey dataset. Price elasticities and expenditure elasticities are estimated for all five main food categories in five regions in China. The trend effects on food consumptions are also modeled and presented. Apart from the temporal food consumption structure changes, which are mostly studied in empirical researches, we have also researched on spatial structure changes, which is rather new in this field.

Our estimate results have provided evidences for structural change in Chinese food consumption patterns. Household food consumption pattern is shifting from ‘mainly grain together with little fiber and protein’ in less developed regions to ‘less grain together with much fiber and protein’ in more developed regions. Our results are supported by most of the empirical researches. However due to data limitations currently, we would expect there still exist improvements in our future study. And more precise results will be obtained if food categories are divided into more specific food types.