Advertisement

International Price Competition Among Food Industries: The Role of Income, Population, and Biased Consumer Preference

  • Madoka OkimotoEmail author
Chapter
  • 377 Downloads
Part of the New Frontiers in Regional Science: Asian Perspectives book series (NFRSASIPER, volume 10)

Abstract

Sensitivity to prices among poor citizens means that a hike in food prices, as a burden on consumers, hinders the adequate supply of inexpensive food and worsens food safety problems caused by low-priced food. This chapter theoretically studies the impact of economic growth with demographic transitions and food safety on food prices, providing a background for policies to protect consumers. The results imply that the sources of food price hikes are (a) economic growth, (b) population growth accompanied by an expansion in the income gap, (c) remarkable population growth in the past, and (d) deterioration in the safety of foods made in the South. In the North, (d) is the most important factor; additionally, (a) and (b) in the South would affect global food prices, while food price hikes are inseparable from economic advancement in the South. Accordingly, guaranteeing the food safety of Southern foods leads to stable food prices in the North, whereas as long as economic advancement in the South continues, encouraging policies that artificially promote stable food prices and ensure food safety will be needed for both developing and developed countries.

Keywords

Food security Food price hike Price competition Income distribution Population growth Bounded rationality 

Notes

Acknowledgements

This chapter has been published in Economic Modeling. I appreciate that Elsevier gave me permission to reprint it in our volume. Okimoto gratefully acknowledges the editors (Sushanta Mallick and Stephen George Hall), anonymous referees, Makoto Tawada (Aichi-Gakuin University), Akihiko Yanase (Nagoya University), Mitsuyoshi Yanagihara (Nagoya University), Hikaru Ogawa (University of Tokyo), Nobuyoshi Yamori (Kobe University), and the financial support of a Grant-in-Aid for JSPS Fellows #23-3981 from JSPS.

References

  1. Baek, J., and W.W. Koo. 2014. On the upsurge of U.S. food prices revisited. Economic Modelling 42:272–276.CrossRefGoogle Scholar
  2. Becchetti, L., A. Palestini, N. Solferino, and T.M. Elisabetta. 2014. The socially responsible choice in a duopolistic market: A dynamic model of “ethical product” differentiation. Economic Modelling 43:114–123.CrossRefGoogle Scholar
  3. Becker, G.S. 1960. An economic analysis of fertility. In Demographic and economic changes in developed countries, ed. G.B. Roberts, Chairman, Universities-National Bureau Committee for Economic Research, 209–240. New Jersey: Princeton University Press.Google Scholar
  4. Calzolari, G., and G. Immordino. 2005. Hormone beef, chlorinated chicken and international trade. European Economic Review 49:145–172.CrossRefGoogle Scholar
  5. Cardebat, J.M., and P. Cassagnard. 2010. North South trade and supervision of the social quality of goods from the South. Review of International Economics 18:168–178.CrossRefGoogle Scholar
  6. Cawley, J., and C.J. Ruhm. 2011. The economics of risky health behaviors. IZA Discussion Papers No. 5728.Google Scholar
  7. Chan, D., and J. Gruber. 2010. How sensitive are low income families to health plan prices? American Economic Review 100:292–96.CrossRefGoogle Scholar
  8. Gruber, J., and B. Köszegi. 2001. Is addiction “rational”? Theory and evidence. Quarterly Journal of Economics 116:1261–1303.CrossRefGoogle Scholar
  9. Herbert, S. 1984. On the behavioral and rational foundations of economic dynamics. Journal of Economic Behavior & Organization 5:35–55.CrossRefGoogle Scholar
  10. Kuznets, S. 1955. Economic growth and income inequality. American Economic Review 45:1–28.Google Scholar
  11. Leibenstein, H. 1974. An interpretation of the economic theory of fertility: Promising path or blind alley? Journal of Economic Literature 12:457–479.Google Scholar
  12. Mariano, M.J.M., and J.A. Giesecke. 2014. The macroeconomic and food security implications of price interventions in the Philippine rice market. Economic Modelling 37:350–361.CrossRefGoogle Scholar
  13. McDermott, R., J.H. Fowler, and O. Smirnov. 2008. On the evolutionary origin of prospect theory preferences. Journal of Politics 70:335–350.CrossRefGoogle Scholar
  14. Stolnity, G. 1964. The demographic transition: From high to low birth rates and death rates. In Population: The vital revolution, ed. R. Freedman, 30–46. New York: Doubleday.Google Scholar
  15. United Nations Population Fund. 2011. State of World population 2011, UNFRA.Google Scholar
  16. Yu, X. 2014. Monetary easing policy and long-run food prices: Evidence from China. Economic Modelling 40:175–183.CrossRefGoogle Scholar

Copyright information

© Springer Japan 2016

Authors and Affiliations

  1. 1.University of ShizuokaShizuokaJapan

Personalised recommendations