Why is food cheaper in rich (European) countries?

Leon Podkaminer

Banca Nazionale del Lavoro Quarterly Review, 2004, vol. 57, issue 230, 297-327

Abstract: Relative to non-food items, food tends to be cheaper in rich, as compared with poorEuropean countries. This tendency cannot be explained in terms of cost developments or foreign-trade considerations. A positive explanation proposed focuses on demand-income-supply interaction. An analysis of a cross-country price-augmented modification of Engel Law, econometrically specified, indicates that the relative price offood is related positively to the supply of food items and negatively to that of non-food items. This finding is consistent with "agricultural price scissors", and also casts a different light on the nature of economic development and structural change.

Keywords: Food; Prices (search for similar items in EconPapers)
JEL-codes: L11 L66 Q11 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (3)

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