Urban Demand for Edible Oils and Fats in China: Evidence from Household Survey Data

Abstract

Using urban household-level survey data from 1992 to 1998, we provide estimates of final demand for edible vegetable oils and animal fats in three regions of China based on an incomplete demand system. For each region, the demand for the major staple oil is price inelastic. The aggregate demand for nonstaple and condiment oils is more responsive to price changes and is elastic in some cases. All edible oils have positive income elasticity, but smaller than one. The share of animal fat in total fat and oil consumption is decreasing with rising income. Older and smaller households exhibit larger per-capita consumption of oils and fats. Exact measures of urban consumer welfare losses associated with trade restrictions on vegetable oil imports indicate that these urban consumers suffer a significant surplus loss as high as $679.19 million in 1998 U.S. dollars. J. Comp. Econ., December 2002, 30(4), pp. 732–753. Department of Economics and Center for Agricultural and Rural Development, Iowa State University, Ames, Iowa 50011-1070; and Institut National de Recherche Agronomique Paris-grignon 75231 Paris, France. © 2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved. Journal of Economic Literature Classification Numbers: Q18, D12, Q17, O18.