MARKET DEVELOPMENT AND FOOD DEMAND IN RURAL CHINA

The authors hypothesize that rural demand for foodstuffs in China amy be restricted in part by incomplete development of markets, in particu lar markets for meat. They model this relationship, and test it on 199 3 Statistical Bureau data (supplemented by field surveys) for rural ho useholds in six counties of hebei Province. They find a multidimension al impact for their market development variable on food consumption be haviour. The results imply that if households purchased 100% of their foodstuffs on markets, rather than the current 38%, income elasticity for grain would fall from .85 to .51, and for meat would rise from .35 to .85. If market development rises with rising income, these results suggest that previous estimates of China's income elasticity for purc hased foodstuffs are biased. JEL Classification Numbers: D1, D4, and P 23.