Rice in Asia: Is It Becoming an Inferior Good?

Abstract

Empirical results using time-series and cross-sectional data indicate that rice in Asia is becoming an inferior good. Income elasticities declined and in some cases became negative between 1961and 1985in most ofthe fourteen Asian countries studied. Accordingly, domestic demand for rice in these countries is not likely to grow as rapidly as it has in the past. As a consequence, there is a potential for excess supplies of rice to develop in Asia, putting downward pressure on rice prices. While governments in Asian countries may need to adjust their rice policies in the future, world rice suppliers may need to develop new markets for rice.

An international comparison of rice consumption behaviours and greenhouse gas emissions from rice production

“…There is a healthy debate about whether rice belongs in the normal or inferior goods categories (Ito et al, 1989;Price and Gislason, 2001). An inferior good is one whose the demand decreases with an increasing consumer income, or vice versa, whereas the opposite is true for the normal goods.…”

“…There is an ongoing debate about whether rice consumption increases with per capita income (PCI) (Ito et al, 1989;Price and Gislason, 2001). PCI and per capita rice consumption data over 44 years (1970e2013) for the eight selected countries (Fig.…”

“…As noted, there is a possible hypothesis that per capita rice consumption is inversely related to per capita income (PCI) since rice is conventionally considered an 'inferior good' and thus demand for rice is expected to decrease with increasing PCI (Ito et al, 1989;Price and Gislason, 2001). People may prefer pulses or meat when their PCI value increases as these foods provide higher amounts of protein but, when PCIs drop, their preference may go back to rice (Price and Gislason, 2001).…”

Food Quality in Domestic Markets of Developing Economies: A Comparative Study of Two Countries

“…In particular, several empirical studies illustrate that in the process of development, consumers shift from less expensive staple foods such as cereals to more expensive foods such as fruits and vegetables, meat and dairy (e.g. Ye and Taylor, 1995;Sahn, 1988;Joshi et al 2007;Ito et al 1989). There is much less empirical evidence on the demand for different 3 qualities of a particular commodity.…”

Modeling China's household food demand in the transition toward a market economy

“…Zhong (1988, 1991) have used China's time-series data to estimate rural and urban per capita grain consumption. Ito et al (1989) Among the theoretical studies of China's household demand. Chow (1987) has analyzed the effects of consumption rationing on consumer demand in urban China using the framework developed by Tobin and Houthakker (1951).…”