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Decompose food price disparities in China: Evidence from wholesale markets

Author

Listed:
  • Li, Qingxiao
  • Yang, Jinyang
  • Yang, Xiaoli
  • Mu, Endong

Abstract

This paper examines regional variations in food prices in China and the underlying factors contributing to these disparities. Leveraging administrative data from agricultural wholesale markets, we construct spatial price indices and reveal consistent monthly trends in disparities. Using our proposed decomposition method, we identify livestock products, particularly beef and pork, as the main components driving regional food price differences. We examine the role of local supply–demand factors in explaining spatial food price variations and find that local gasoline prices are a significant contributor to food price disparity. A one percent increase in local gasoline prices leads to a 0.6 percent rise in local food prices and exacerbates spatial food price disparities by 0.5–1.0 percent. These results highlight the importance of considering transportation costs and regional supply–demand dynamics in understanding food price variations across regions. Our findings have implications for policy aiming to address regional food price disparities and ensure food affordability.

Suggested Citation

  • Li, Qingxiao & Yang, Jinyang & Yang, Xiaoli & Mu, Endong, 2025. "Decompose food price disparities in China: Evidence from wholesale markets," Food Policy, Elsevier, vol. 131(C).
    • Handle: RePEc:eee:jfpoli:v:131:y:2025:i:c:s0306919225000211
    DOI: 10.1016/j.foodpol.2025.102817
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    More about this item

    Keywords

    Food prices; Spatial price indices; Price disparity; Oil prices; China;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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