TY - JOUR
T1 - Quantifying the structure of food demand in China
T2 - An econometric approach
AU - Hovhannisyan, Vardges
AU - Gould, Brian W.
N1 - Copyright:
Copyright 2012 Elsevier B.V., All rights reserved.
PY - 2011/11
Y1 - 2011/11
N2 - This article examines food demand structure and its dynamics for 11 commodities in urban China. The analysis is based on household-level expenditure survey data for two cross-sectional surveys of Chinese households pertaining to food expenditure patterns during 1995 and 2003. Pre-committed components of commodity demands, that are insensitive to economic variables, are explored. We use the generalized quadratic almost ideal demand system (GQAIDS) for its empirical superiority to the generalized almost ideal demand system (GAIDS), and estimate the associated parameters via full information maximum likelihood procedure (FIML) accounting for endogeneity of total expenditures on food for home consumption (FAH). We also use quality-adjusted commodity unit values to control for quality differences resulting from commodity aggregation and food choice. Furthermore, we derive GQAIDS elasticity formulas, and estimate income elasticities without restrictions. The results partially support the hypothesis that an average Chinese household has incorporated elements of Western diet (fine grains) into traditional Chinese food diet over time. Moreover, the outcome of a simple test developed here points to possible preference changes for a majority of food staples under study.
AB - This article examines food demand structure and its dynamics for 11 commodities in urban China. The analysis is based on household-level expenditure survey data for two cross-sectional surveys of Chinese households pertaining to food expenditure patterns during 1995 and 2003. Pre-committed components of commodity demands, that are insensitive to economic variables, are explored. We use the generalized quadratic almost ideal demand system (GQAIDS) for its empirical superiority to the generalized almost ideal demand system (GAIDS), and estimate the associated parameters via full information maximum likelihood procedure (FIML) accounting for endogeneity of total expenditures on food for home consumption (FAH). We also use quality-adjusted commodity unit values to control for quality differences resulting from commodity aggregation and food choice. Furthermore, we derive GQAIDS elasticity formulas, and estimate income elasticities without restrictions. The results partially support the hypothesis that an average Chinese household has incorporated elements of Western diet (fine grains) into traditional Chinese food diet over time. Moreover, the outcome of a simple test developed here points to possible preference changes for a majority of food staples under study.
KW - Expenditure endogeneity
KW - Food preferences
KW - Generalized quadratic almost ideal demand system
KW - Pre-committed demand
UR - http://www.scopus.com/inward/record.url?scp=81155148739&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=81155148739&partnerID=8YFLogxK
U2 - 10.1111/j.1574-0862.2011.00548.x
DO - 10.1111/j.1574-0862.2011.00548.x
M3 - Article
AN - SCOPUS:81155148739
SN - 0169-5150
VL - 42
SP - 1
EP - 18
JO - Agricultural Economics
JF - Agricultural Economics
IS - SUPPL. 1
ER -