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Standards Driven Rural Development: A General Equilibrium Model with Market Imperfections

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  • Xiang, Tao
  • Huang, Jikun
  • Kancs, d'Artis
  • Swinnen, Johan F.M.

Abstract

We develop a general equilibrium households model to analyze the effects of high standards food chains taking seriously into account market imperfections. To measure structural production changes and welfare effects on rural and urban households, our model has two types of agents, five kinds of products and four types of factors. We calibrate the model using dataset from China and do simulations through three ways: increasing world price of high standards food, increasing urban households’ preference for high standards food, and relaxing credit constraints on high standards food production. The simulation results show that how poor households are affected depends on the nature of the shocks leading to the expansion of high standards sector and the market imperfections, and whether the poor can gain through the labor market if they are excluded from high standards farming.

Suggested Citation

  • Xiang, Tao & Huang, Jikun & Kancs, d'Artis & Swinnen, Johan F.M., 2009. "Standards Driven Rural Development: A General Equilibrium Model with Market Imperfections," 2009 Conference, August 16-22, 2009, Beijing, China 51476, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:51476
    DOI: 10.22004/ag.econ.51476
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    More about this item

    Keywords

    Agricultural and Food Policy;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • Y80 - Miscellaneous Categories - - Related Disciplines - - - Related Disciplines

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