Impact of changing income distribution on fluid milk consumption in urban China

Wenbo Zhu, Yongfu Chen, Zhihao Zheng, Jing Zhao, Guojing Li and Wei Si

China Agricultural Economic Review, 2020, vol. 12, issue 4, 623-645

Abstract: Purpose - China has experienced a fast economic growth and shown a significant rise in income inequality in the past decades. During the same period, fluid milk consumption in urban areas has rapidly expanded. The objective of this paper is to analyze and simulate the influence of income distribution changes on fluid milk consumption of households in urban China. Design/methodology/approach - This study applies an inverse hyperbolic sine (IHS) double-hurdle model to modeling at-home fluid milk consumption of households across different income strata based on a sample of 11,861 urban households in five provinces in China, and simulating the impact of changing income distribution, including five income growth patterns, on fluid milk consumption of total households as well as specific household groups. Findings - The fluid milk consumption in urban China will continue to increase, with the unconditional income elasticity being 0.334 for the full sample and 0.347, 0.335 and 0.162 for the low-, middle-, and high-income groups, respectively. The simulation results show an evidence that, compared with distribution-neutral and disparity-enlarging income growth patterns, a rising income equality would lead to a more significant increase in fluid milk consumption. And the inequality-reducing income growth pattern has a larger impact on fluid milk consumption of households with seniors and no children, as well as households having no local urban household registration (hukou). Practical implications - The government should strengthen the supply measures of fluid milk in urban areas, enlarge domestic dairy production, and diversify the sources of milk imports. It is also necessary to subsidize low-income families, especially households with seniors or households migrated from other areas without getting local urbanhukou, which could simultaneously improve nutritional benefits and alleviate financial pressures. Originality/value - A simulation considering the evolution of income distribution as well as different household groups is conducted. Widely distributed data with a large sample size and detailed demographic information are used. The problems of zero consumption and non-normal distribution are addressed by the IHS double-hurdle model.

Keywords: Fluid milk consumption; Income growth; Income distribution; IHS double-hurdle model; Urban China (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:caerpp:caer-09-2019-0162

DOI: 10.1108/CAER-09-2019-0162

Access Statistics for this article

China Agricultural Economic Review is currently edited by Dr Fu Qin, Dr Jikun Huang, Dr Kevin Z Chen, Dr Weiming Tian, Prof Daniel Sumner, Prof Xian Xin and Prof Holly Wang

More articles in China Agricultural Economic Review from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().