Working Paper 99-02
Department of Economics
University of North Carolina, Chapel Hill
http://www.unc.edu/depts/econ

Structural Change in the Impact of Income on Food Consumption in China, 1989-93*

Xuguang Guo, Thomas A. Mroz††, Barry M. Popkin, and Fengying Zhai†††

 

Abstract: This paper contains a detailed longitudinal study of 3,800 households in China for data collected in 1989, 1991, and 1993. The increase in income in China over time coincides with a shift in the demand for a range of inferior and normal food groups. We document shifts in the income elasticities for a range of goods that are related to flour and flour products, inferior grains, rice, meat and meat products, eggs, and edible vegetable oils. Income elasticities for more luxury foods increased significantly from 1989 to 1993, while less superior goods became more inferior over this four year span. Based on these results, it would appear to be difficult to use cross-sectional and longitudinal income and price elasticities to predict changes in consumption over time in developing countries. What is needed is an understanding of how preferences develop and change during the course of modernization. Until similar case studies become available that allow pone to generalize from China, it will be impossible to derive accurate predictions about nutritional change in developing countries.

 

Nutrition Department, ††Department of Economics University of North Carolina at Chapel Hill, USA; and †††Institute of Nutrition and Food Hygiene, Chinese Academy of Preventive Medicine, Beijing, China