This study explores the linkage of the determinants of food choice with consumer nutrient availability by developing a procedure to measure changes in nutrient availability as the demand for food items change. It uses demand elasticities from traditional demand analysis to estimate elasticities of changes in the nutritional content of consumer diets. The procedure is applied to estimate nutrient elasticities for fifteen nutrients in response to changes in thirty-five food prices and per capita income. Copyright 1996, Oxford University Press.
PurposeChina's remarkable income growth has changed the food landscape in recent years. Chinese consumers are demanding greater food quantity and quality and changing the nutrient content of their diets. Most food demand studies are based on data from earlier time periods before these structural changes had taken hold. The purpose of this paper is to show how the rapid change in food markets and surprisingly slow growth of food imports warrants a new assessment of food demand in China.Design/methodology/approachEngel equations measuring elasticities of food quantity and quality purchases with respect to household income are estimated. These estimates are then converted to nutrient elasticities to show how the availability of nutrients varies with income based on the Engel demand relationship.FindingsThe income elasticities diminish as income rises. Households in the top tier of the income distribution appear to have reached a saturation point in the consumption of most food items. As income rises, most additional spending is on foods with higher unit values that may reflect better cuts of meat or branded items. The pattern of food purchases for households at different income levels suggests that protein, saturated fat, and cholesterol intake rises with increased income. The change in diets prompted by rising income is most pronounced for low‐income households.Originality/valueThis paper applies a unique approach to measure income, quality, and nutrient elasticities within the same framework of Engel relationship. The finding has important implications for opening new market opportunities of imported foods and understanding dietary change in China.
Relationships between price elasticities and price flexibilities are examined, with emphasis on comparing sizes of difference between a directly estimated demand matrix and an inverted demand matrix. Results show that by using inverted elasticities to represent flexibilities or vice versa, sizable measurement errors may be committed. In agricultural policy and program analysis, a directly estimated demand matrix should be used.
This paper analyzes the demand for labor, capital, and energy in the U.S. foodmanufacturing industry using Allen and Morishima elasticities of substitution. The demand for capital is more elastic than for labor and energy, and these production factors are substitutable, especially between capital and labor.
This article provides a theoretically consistent framework for estimating a complete price dependent demand system, where the concept of distance function and its related substitution and scale effects are used. The approach is applied to a U.S. demand system consisting ofthirteen food and one nonfood categories.
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