CHINA'S RURAL HOUSEHOLD DEMAND FOR FRUIT AND VEGETABLES

A two-stage budgeting LES-LA/AIDS system is sued to estimate rural household demand in China with special emphasis on changes in demand for fruit and vegetable commodities across different income groups. The own-price elasticity for food was found to be more elastic than that for clothing, housing, durable goods, and other items. Within the food group, price elasticities range from -1.042 to -0.019. Grain, with an expenditure elasticity of almost unity, is an important staple food for the average rural household. Vegetables are important nonstaple foods relative to fruits. Lower value vegetables are the most price elastic in the vegetable group. Fruits are more price elastic than vegetables, with grapes being the most price elastic. Different income groups share a common demand function