Empirical Analysis on the Mutual Substitution Relationship between Vegetables in Beijing Based on LA-AIDS Model

Abstract

Vegetables are parts of the most important agricultural products in daily life. With the influence of season, supply and demand, the prices fluctuate greatly, and there are also some substitute linkages between different vegetables. Vegetable market is an important part for the stability of agricultural products market. But in recent years, the abnormal fluctuations in vegetable prices become more and more apparent, abnormal fluctuations in vegetable prices caused some impact not only on vegetable cultivation, but also on vegetable processing. Consumption have a certain impact on market stability. In the increasingly close relationship between different markets, the substitution between agricultural products is growing, and the price of agricultural products also penetrate each other. Other agricultural products, especially vegetables with strong substitutes, the price changes will have a certain impact on the price of alternative vegetables. This paper mainly explores the relationship between vegetable prices by explaining the relationship between different vegetable prices, explaining the theory of price fluctuation from the perspective of substitution, and also providing some reference for the analysis of the alternative relationship between different agricultural products. In this paper, we selected the daily price data of 30 representative vegetables from January 1, 2010 to December 31, 2014 in the wholesale market of Beijing, and used LA-AIDS method to analyse. The results showed that the cross price coefficient between leafy vegetables and root vegetables, cabbage, cabbage, beans, melons and fungi was positive, and there was an alternative relationship with eggplant, onion and garlic, (The elasticity of expenditure), from large to small are: leafy vegetables, onion and garlic, root vegetables, potato taro species, and so on., Eggplant, melons, sprouts, beans, cabbage, cabbage, fungi.