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Article
Publication date: 25 January 2011

Masudul Alam Choudhury

This paper aims to address the important issue of world food pricing from a new perspective of demand, supply production and preferences.

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Abstract

Purpose

This paper aims to address the important issue of world food pricing from a new perspective of demand, supply production and preferences.

Design/methodology/approach

This paper reviews the models of demand and supply and introduces the author's own modeling idea in this field of global food pricing and production.

Findings

There is no such thing as permanent food scarcity, and that food scarcity is as much an ethical problem as is artificially generated scarcity of the good things of life, the basic needs of life, on which life has a fair share. The paper goes on to explain a relational model of learning to understand complementarities between the basic needs, amongst which essentially is food as a globally provisioned social good. Also endemic in this transformation are the preferences that conscious consumers ought to have, the production that appropriate technology should bring about, and the supply as an elastic function of price in a basic‐needs regime of food production and pricing.

Research limitations/implications

Further statistical data needed for estimation.

Practical implications

The paper explains such a relational model of ethically‐induced perspectives on food demand, supply, production and pricing. The paper then investigates how the same issues can be examined in the conventional large‐scale econometric models against the data that are available. The paper suggests revisions in such econometric models in the light of the ethically‐induced relational model for understanding the issues underlying food demand, production, supply and pricing.

Social implications

Several philosophical questions in regard to the appropriateness of the conventional models that fall short of addressing such essential issues, and thus also fail to predict behavior and forecast future, are examined. Some policy, program and strategic implications of the study are pointed out in the analytical conclusion.

Originality/value

The paper goes on to explain a relational model of learning to understand complementarities between the basic needs, amongst which essentially is food as a globally provisioned social good. Also endemic in this transformation are the preferences that conscious consumers ought to have, the production that appropriate technology should bring about, and the supply as an elastic function of price in a basic‐needs regime of food production and pricing. The paper explains such a relational model of ethically‐induced perspectives on food demand, supply, production and pricing. The paper then investigates how the same issues can be examined in the conventional large‐scale econometric models against the data that are available.

Details

Journal of Economic Studies, vol. 38 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 16 December 2015

Won W. Koo and Richard Taylor

This chapter examines whether the supply of food is large enough to feed an increasing world population for the 2012–2050 period. Special attention is given to the implications of…

Abstract

Purpose

This chapter examines whether the supply of food is large enough to feed an increasing world population for the 2012–2050 period. Special attention is given to the implications of bioenergy production on global and regional food security.

Methodology/approach

For this analysis, a global food security simulation model was developed to determine if the global and regional supply of food, in terms of calories, is large enough to meet the demand and also to estimate the impact on food prices.

Findings

This chapter found that the global supply of food in terms of calories is insufficient to satisfy food demand in 2050, with food shortages especially significant in Africa.

Practical implications

The estimated shortage of food may result in significant food-price inflation by 2050.

Details

Food Security in an Uncertain World
Type: Book
ISBN: 978-1-78560-213-9

Keywords

Article
Publication date: 2 December 2022

Christian H. Kuhlgatz, Jiaqi Huang and Gerrit Antonides

The purpose of this paper is to evaluate the effects of price and income changes on food and nutrient demand of rural households by including own-produced food and production-side…

Abstract

Purpose

The purpose of this paper is to evaluate the effects of price and income changes on food and nutrient demand of rural households by including own-produced food and production-side effects in the demand estimation to correct potential measurement bias in the income and price elasticities for rural households in underdeveloped areas. Simulation results of income and grain price changes on food and nutrition security are provided for economic nutrition security policy applications.

Design/methodology/approach

This study analyzes survey data of 1,555 households from underdeveloped rural areas of China to find out how price and income changes affect food and nutrition insecurity of rural households. The authors employ the quadratic almost ideal demand system (QUAIDS) in a two-stage budgeting framework, using quality adjusted prices that were retrieved with regressions of the difference between the unit value surveyed at household level and its village average on household characteristics. The bias correction is implemented by using an augmented IV (instrumental variable) method, in which each market price is instrumented with farm-specific variables. Important macro- and micronutrient elasticities are computed for (a) households with agriculture as main income and (b) other households (of which still many have agriculture as a side business). Finally, the authors use these elasticities to simulate how changes in income or grain prices affect the food and nutrition security in the studied areas.

Findings

In general, food income elasticities of agricultural households are at a higher level than those for other households, and so are the food price elasticities. Income changes also have a greater nutritional effect on agricultural households than on other households. Nutrient income elasticities ranged from 0.22 (energy) to 0.27 (Vitamin A) for agricultural households and from 0.19 (energy) to 0.23 (Vitamin A) for other households. Grain price increases have greater effect on nutritional status of non-agricultural households, while a grain price reduction is not clearly favoring the nutritional situation of a particular household group.

Originality/value

This demand study contributes to the literature by taking into account differences in consumption of own production between households and the potential endogeneity of prices resulting thereof. The authors also demonstrate that merely reporting nutrient elasticities might not be sufficient for policy recommendations, and simulations should be reported as a valuable addition.

Details

China Agricultural Economic Review, vol. 15 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 30 July 2018

Yanjun Ren, Yanjie Zhang, Jens-Peter Loy and Thomas Glauben

Given the fact that the income disparity has become extremely severe in rural China, the purpose of this paper is to examine heterogeneity in food consumption among various income…

Abstract

Purpose

Given the fact that the income disparity has become extremely severe in rural China, the purpose of this paper is to examine heterogeneity in food consumption among various income classes and to investigate the impact of changes in income distribution patterns on food demand in rural China.

Design/methodology/approach

In this study, the authors partition the households into five income classes according to the distribution of household per capita net income. Using household data drawn from the China Health and Nutrition Survey in 2011, a two-stage demand model is applied to estimate a food demand system for each of the income classes. After obtaining the estimated income elasticities of eight studied food groups for each income class, the authors then examine the responsiveness of food demand to the changes in income distribution by means of four scenarios with varying income distribution.

Findings

The empirical results indicate that substantial differences in food consumption exist across various income classes. Specifically, the lowest-income households are more sensitive to price and income changes for most studied food groups than the highest-income households are. In general, income responsiveness is higher for meats, aquatic products and dairy products. Based on estimated income elasticities, the projected food consumption under different income distribution patterns shows that changes in income distribution have significant influences on food consumption. In addition, the authors conclude that a more equal distribution of income would be associated with a higher demand for food in rural China.

Originality/value

This paper employs a two-stage demand model to estimate food demand in rural China by income classes. The results imply substantial differences in food demand for various income classes. Therefore, income distribution should be taken into account instead of an average estimation for the population as a whole when investigating food demand in rural China. Given the significant changes in income distribution in rural China, this study provides several important policy implications to alleviate income inequality and poverty, as well as to improve nutrition for lower-income classes.

Details

China Agricultural Economic Review, vol. 10 no. 3
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 8 June 2015

Sakiru Oladele Akinbode

Most demand studies have concentrated on the estimation of expenditure elasticities for single commodity at a time thereby not being able to reveal the details of the…

Abstract

Purpose

Most demand studies have concentrated on the estimation of expenditure elasticities for single commodity at a time thereby not being able to reveal the details of the relationships among various food items demanded by households. The purpose of this paper is to simultaneously estimate the demand equations for a number of food items and to estimate cross-price elasticities which are necessary for studying consumer behaviours, marketing, production planning and policy making.

Design/methodology/approach

Relevant data were collected from 320 randomly selected households in a multistage sampling procedure. The normalized data were analysed in a system of equation with symmetry, adding-up and homogeneity restrictions imposed on the model.

Findings

Expenditure elasticities show that gaari and palm oil were inferior food items while others could be classified as normal. Own-price elasticities showed that beans, plantain, yam flour and rice were luxuries while others were necessities. Cross-price elasticities revealed that some were substitutes of one another while others were compliments and some were not related.

Research limitations/implications

The data were collected using a month recall approach and generalizing its findings beyond such months of a year may be misleading. Therefore, other researchers should repeat the study across months and locations.

Social implications

The study recommended that food policies should be broad based to encompass majority of the food items consumed in the study area given the intrinsic relationship inherent among them as their demands were interrelated and consumer behaviours as revealed by various elasticities be considered in formulating food-related policies.

Originality/value

The paper emphasized the need to model food demand in a system of equations as against single equation modelling.

Details

International Journal of Social Economics, vol. 42 no. 6
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 12 September 2016

Ji Yan, Kun Tian, Saeed Heravi and Peter Morgan

This paper aims to investigate consumers’ demand patterns for products with nutritional benefits and products with no nutritional benefits across processed healthy and unhealthy…

Abstract

Purpose

This paper aims to investigate consumers’ demand patterns for products with nutritional benefits and products with no nutritional benefits across processed healthy and unhealthy foods. This paper integrates price changes (i.e. increases and decreases) into a demand model and quantifies their relative impact on the quantity of food purchased. First, how demand patterns vary across processed healthy and unhealthy products is investigated; second, how demand patterns vary across nutrition-benefited (NB) products and non-nutrition-benefited (NNB) products is examined; and third, how consumers respond to price increases and decreases for NB across processed healthy and unhealthy foods is investigated.

Design/methodology/approach

Here, a demand model quantifying scenarios for price changes in consumer food choice behaviour is proposed, and controlled for heterogeneity at household, store and brand levels.

Findings

Consumers exhibit greater sensitivity to price decreases and less sensitivity to price increases across both processed healthy and unhealthy foods. Moreover, the research shows that consumers’ demand sensitivity is greater for NNB products than for NB products, supporting our prediction that NB products have higher brand equity than NNB products. Furthermore, the research shows that consumers are more responsive to price decreases than price increases for processed healthy NB foods, but more responsive to price increases than price decreases for unhealthy NB foods. The findings suggest that consumers exhibit a desirable demand pattern for products with nutritional benefits.

Originality/value

Although studies on the effects of nutritional benefits on demand have proliferated in recent years, researchers have only estimated their impact without considering the effect of price changes. This paper contributes by examining consumers’ price sensitivity for NB products across processed healthy and unhealthy foods based on consumer scanner data, considering both directionalities of price changes.

Details

European Journal of Marketing, vol. 50 no. 9/10
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 5 September 2008

Sylvain Charlebois

The purpose of this paper is to provide a structured demand chain design framework that can be linked with gateway and corridor management practices.

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Abstract

Purpose

The purpose of this paper is to provide a structured demand chain design framework that can be linked with gateway and corridor management practices.

Design/methodology/approach

The model in this paper presents supply and demand thrusts that could leverage Canada's position in international food trade.

Findings

Since a direct correlation exists between the wealth of a nation and how it consumes food, the paper first presents five utilities and several factors that are perceived differently by customers once a nation becomes affluent. Then it presents supply and demand thrusts that could leverage Canada's position in international food trade. Finally, a demand chain design framework is suggested.

Research limitations/implications

The framework is meant to be organically generic and not applied to one specific commodity or market, as all commodities and targeted markets necessitate an idiosyncratic approach. Although it is met to be applicable to topographies that offer logistical challenges such as Canada.

Practical implications

It has been recognized that agriculture and food companies have a long tradition of being commodity‐driven, with an emphasis on production technology, high volumes, and quality consistency. In the context of global hyper‐competitivity, the ability to understand customer needs and adapt to a wider variety of customer situations will become crucial.

Originality/value

Without being specific to a targeted market or commodity, a demand chain management framework for food products is presented which provides an integrative approach for demand chain design based on food marketing practices, and which requires continuous evaluation of perceived utilities by customers.

Details

British Food Journal, vol. 110 no. 9
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 30 January 2009

Abiodun Elijah Obayelu, V.O. Okoruwa and O.I.Y. Ajani

The purpose of this paper is to examine the impact of socio‐economic variables on households' food demand. This paper derived the indirect utility function in terms of expenditure…

Abstract

Purpose

The purpose of this paper is to examine the impact of socio‐economic variables on households' food demand. This paper derived the indirect utility function in terms of expenditure and price through the use of nonlinear demand quadratic almost ideal demand system (QUAIDS) model to estimate price, expenditure and elasticities of food items consumed in the North‐Central, Nigeria, and the impact of the socio‐economic variables on households' food demand.

Design/methodology/approach

The primary data used came from random selection of 396 households between 2006 and 2007 through a stratified random sampling procedure from Kwara and Kogi states making up the North Central zone in Nigeria.

Findings

All own price elasticities of the six food groups analyzed (root and tubers – RT, cereal – CR, legume – LG, animal protein – AP, fruits and vegetable – FV, fats and oil) showed that they are price inelastic. The results of income elasticity show that AP consumption is the most sensitive to income changes, while fats and oil is the least sensitive to income changes. Factors that positively and significantly affected demand for LG, FV, AP, CR and RT were household size (HSZ), level of education, primary occupation, access to credit, presence of children ≤6 years mainly at P<0.01. HSZ (P<0.01) negatively affected demand for AP.

Originality/value

This paper is original and novel in that it examines the impact of socio‐economic variables on households' food demand. High‐income elasticities of demand for all the food groups in QUAIDS except fruits and vegetable, as well as fats and oils, suggests that income‐generating policies will foster higher levels of consumption for these commodities.

Details

China Agricultural Economic Review, vol. 1 no. 2
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 1 March 2005

Sinne Smed and Jørgen Dejgaard Jensen

The purpose of this paper is to analyze how news about food‐related health risks affects consumers’ demands for safe food products.

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Abstract

Purpose

The purpose of this paper is to analyze how news about food‐related health risks affects consumers’ demands for safe food products.

Design/methodology/approach

By identifying structural breaks in an econometrically estimated demand model, news with permanent impact on demand is distinguished from news with temporary impact. The Danish demand for pasteurized versus shell eggs is used as an illustrative case.

Findings

Negative safety news about one product variety can provide significant stimulation to the demand for safe varieties. Severe negative news about the safety of shell eggs induces a permanent increase in the demand for pasteurized eggs, while more moderate negative news influences demand temporarily and to a lesser extent. There is, however, considerable variation in the response to food safety news across socio‐demographic groups of consumers.

Research limitations/implications

The study has focused on the demand for raw eggs. Responses to food safety news may differ across foods. Furthermore, the study abstracts from possible cross‐effects of safety news concerning other foods.

Practical implications

The findings may be utilized for optimization of the timing and targeting of food safety information campaigns.

Originality/value

The paper combines information, food safety and econometric methods to analyze the cross‐impacts between negative food safety news and the demand for safe foods.

Details

British Food Journal, vol. 107 no. 3
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 5 May 2015

Li Jiang, Karen C. Seto and Junfei Bai

The impact of dietary changes associated with urbanization is likely to increase the demand for land for food production. The purpose of this paper is to examine the impact of…

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Abstract

Purpose

The impact of dietary changes associated with urbanization is likely to increase the demand for land for food production. The purpose of this paper is to examine the impact of urban economic development on changes in food demand and associated land requirements for food production.

Design/methodology/approach

Based on economic estimates from the Almost Ideal Demand System, feed conversion ratios, and crop yields, the authors forecast and compare future dietary patterns and land requirements for two types of urban diets in China.

Findings

The results show that the expenditure elasticities of oil and fat, meat, eggs, aquatic products, dairy, and liquor for the diet of capital cities are greater than those for the diet of small- and medium-sized cities. The authors forecast that capital city residents will experience a more rapid rate of increase in per capita demand of meat, eggs, and aquatic products, which will lead to much higher per capita land requirements. Projections indicate that total per capita land demand for food production in capital cities will increase by 9.3 percent, from 1,402 to 1,533 m2 between 2010 and 2030, while total per capita land demand in small- and medium-sized cities will increase only by 5.3 percent, from 1,192 to 1,255 m2.

Originality/value

The results imply that urban economic development can significantly affect the final outcomes of land requirements for food production. Urban economic development is expected to accelerate the rate of change toward an affluent diet, which can lead to much higher future land requirements.

Details

China Agricultural Economic Review, vol. 7 no. 2
Type: Research Article
ISSN: 1756-137X

Keywords

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