Lanterna Rally

Author: Takamasa Okutsu

Publisher:

Published: 1991

Total Pages: 992

ISBN-13:

The purpose of this study is to comprehend food demand structure and its changes under rapid economic development theoretically and statistically. The recently developed Far East Asian countries, Japan, Korea, and Taiwan were chosen to obtain implications for the food demand patterns in the future industrialized countries around the world. Food demands for nine food commodities, rice, bread/wheat, barley, beef, pork, chicken, fish, eggs, and milk were analyzed. The first three commodities are plant origin, the rest are animal origin. Study periods are from the early 1910's to the end of 1980's for Japan (the end of 1930's to the early 1950's were excluded because of the war period), and from the early 1960's to the end of the 1980's for both Korea and Taiwan. The importance of income growth on food demand changes in developing countries has been stressed. Many studies have been done based on a simple model using per capita income as the only explanatory variable, or at most including the prices of own and closely related commodities. This study employed a more versatile analytical framework, incorporating a wider range of cross price effects. This study has two main objectives; the first is to reconsider the effect of income growth on food demands, particularly to examine whether income elasticities change between various stages of economic development. The other is to evaluate non-economic factors that cause changes in food consumption patterns under economic development. Age-population composition and household size were two of the explanatory variables. A complete demand system by adding dynamic and demographic features to DEATON and MUELLBAUER's (1980a, b) LA/AIDS model. Data were complied from various secondary sources. Price and quantity data sets passed nonparametric tests of stability of preferences. Two different estimation techniques; an iterative SUR (maximum likelihood) estimation and a single equation estimation using the homogeneity condition and first order autocorrelation were applied for the demand system. Assuming weak separability for the group of foods in the study, the expenditure elasticities calculated by the demand system were converted to the ones equivalent to income elasticities. Major findings were: 1) the impact of the "pure" income effect was not significant. However, effects of age-population composition changes and own and cross price effects were significant. The impacts from changes in own price level and/or age-population composition exceeded the impacts from changes in expenditure level most frequently for animal origin foods. Significant cross price effects between animal and plant origin foods were observed. 2) Various patterns of changes in income elasticities were observed. Unexpectedly, some animal origin foods such as beef, chicken, and eggs showed negative expenditure elasticities at low income level. This phenomenon was observed across countries and across time periods.