Impact of Income Growth and Economic Reform on Nutrition Availability in Urban China: 1986-2000

Urban China has experienced rapid income growth over the past 20 years. However, nutrition availability for the poor declined in the 1990s. Does this imply a zero or negative income elasticity? Using a large representative urban sample of repeated cross-sectional data for the period 1986-2000, we find that income elasticities of calorie availability are far from zero, and the lower the income level, the higher the income elasticity. The main reason for the reduction in calorie availability in the early 1990s was a sharp increase in food prices. Afterward, calorie availability for the above-medium-income groups stabilized and then increased. For the low-income groups, calorie availability continued to decline, which may be related to the large-scale social welfare reform that increased households' need to pay for nonfood necessities, such as education, medical, and housing expenses. (c) 2009 by The University of Chicago. All rights reserved..