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Food expenditure responses to income/expenditure shocks in rural China

Food expenditure responses to income/expenditure shocks in rural China PurposeThe purpose of this paper is to examine the impacts of large income and expenditure shocks on household food expenditures and determines whether the impacts of large shocks differ among households, especially low-income households.Design/methodology/approachThe study’s data are drawn from a household survey conducted in rural China. Multivariate analysis examines the impacts of large income and expenditure shocks on food expenditures.FindingsThe impacts of large positive income shocks on food expenditure are moderate. However, households reduce their per capita food expenditures within a range of about 25-30 percent after suffering large negative shocks. The greatest impact is found for shocks where expenditures more than double, followed by the impact of shocks where income declines by more than half. Moreover, food expenditures among low-income households are much more sensitive to large negative income and expenditure shocks. The paper concludes with policy implications.Originality/valueThis is the first Chinese study to empirically examine the impacts of different income and expenditure shocks on household food expenditures. The results have important implications for smoothing households’ food consumption after they suffer from shocks. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Agricultural Economic Review Emerald Publishing

Food expenditure responses to income/expenditure shocks in rural China

China Agricultural Economic Review , Volume 9 (1): 12 – Feb 6, 2017

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1756-137X
DOI
10.1108/CAER-01-2016-0006
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to examine the impacts of large income and expenditure shocks on household food expenditures and determines whether the impacts of large shocks differ among households, especially low-income households.Design/methodology/approachThe study’s data are drawn from a household survey conducted in rural China. Multivariate analysis examines the impacts of large income and expenditure shocks on food expenditures.FindingsThe impacts of large positive income shocks on food expenditure are moderate. However, households reduce their per capita food expenditures within a range of about 25-30 percent after suffering large negative shocks. The greatest impact is found for shocks where expenditures more than double, followed by the impact of shocks where income declines by more than half. Moreover, food expenditures among low-income households are much more sensitive to large negative income and expenditure shocks. The paper concludes with policy implications.Originality/valueThis is the first Chinese study to empirically examine the impacts of different income and expenditure shocks on household food expenditures. The results have important implications for smoothing households’ food consumption after they suffer from shocks.

Journal

China Agricultural Economic ReviewEmerald Publishing

Published: Feb 6, 2017

References