Abstract
Price endogeneity has been ignored in previous analyses of food demand in urban China. We exploit data provided by the China National Bureau of Statistics on agricultural commodity supply shifters and use reduced-form price equations to account for price endogeneity. Applying our unique econometric approach to the analysis of provincial-level food demand in China, we find strong statistical evidence of price endogeneity. Models that ignore price endogeneity result in substantially biased elasticities and misleading estimates of future food demand in China.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 386-406 |
| Number of pages | 21 |
| Journal | Journal of Agricultural Economics |
| Volume | 68 |
| Issue number | 2 |
| DOIs | |
| State | Published - Jun 2017 |
Bibliographical note
Publisher Copyright:© 2016 The Agricultural Economics Society
Keywords
- Consumer welfare
- Generalized Quadratic AIDS
- expenditure endogeneity
- food demand
- price endogeneity
- urban China
