Why Is Food Cheaper in Rich (European) Countries?

Leon Podkaminer

No 322, wiiw Research Reports from The Vienna Institute for International Economic Studies, wiiw

Abstract: Relative to non-food items, food tends to be cheaper in rich, as compared with poor European 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's Law, econometrically specified, indicates that the relative price of food 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: relative prices; structural change; cross-country demand functions; demand for food (search for similar items in EconPapers)
JEL-codes: D12 D51 O14 (search for similar items in EconPapers)
Pages: 31 pages including 2 Tables and 6 Figures
Date: 2005-10
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Related works:
Journal Article: Why is food cheaper in rich (European) countries? (2004)
Journal Article: Why is food cheaper in rich (European) countries? (2004)
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