How Does Income Heterogeneity Affect Future Perspectives on Food Consumption? Empirical Evidence from Urban China

Area of Science:

• Agricultural Economics
• Consumer Behavior Analysis
• Socioeconomic Studies

Background:

• China is experiencing rapid dietary shifts and evolving income distribution.
• Understanding these changes is crucial for predicting future food consumption patterns.

Purpose of the Study:

• To analyze the impact of income heterogeneity on food consumption predictions in urban China.
• To forecast future food consumption trends by incorporating income-specific consumer behaviors.

Main Methods:

• Utilized a two-stage Exact Affine Stone Index Implicit Marshallian Demand System (EASI demand system) model.
• Applied dynamic simulation methods accounting for income heterogeneity.
• Estimated demand elasticity across various income strata using data from 22,210 urban households.

Main Results:

• Income elasticity decreases as income grows.
• Major food item consumption is projected to increase by 7.9% to 42.0% over 15 periods.
• Low-income groups exhibit significantly higher food consumption growth potential compared to middle- and high-income groups.

Conclusions:

• Accurate food consumption forecasting requires considering distinct consumer behaviors across income groups.
• Government food policies should be differentiated by income level to support sustainable food system transformation.