Household own-consumption and grain marketable surplus in China

John Davis and Ping Zong

Applied Economics, 2002, vol. 34, issue 8, 969-974

Abstract: This paper explores the interrelationships between Chinese grain prices, farm households' income, their own-consumption of grain and their marketable surplus supply during the rural reform era. A Gorman polar indirect utility function is employed, from which a set of household grain supply and consumption functions are estimated. The integrated modelling approach recognizes the interdependence of household supply and consumption decisions. A set of compensated elasticities are derived to show the effects of grain prices, farm income and full household income on grain consumption and on-farm labour supply. The impact of own-consumption on marketable surplus supply is then gauged by estimating conditional and unconditional price elasticities of marketable surplus supply. The results point to the relatively strong positive effect of off-farm income on household's own-consumption of grain and the negative influence this has had on the marketable surplus of grain in China during the reform era.

Date: 2002
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DOI: 10.1080/00036840110065826

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