Consumers' preferences for dairy products in alternative food store formats in China

China's emergence as the world's fastest growing economy during the last two decades has created incredible demand and a flourishing market for various agricultural products. China was once believed to be a serious threat to the world agricultural product markets; however, most researchers today believe that China does not threaten the world, but rather plays an important role in the world market. This situation creates unprecedented market and trade opportunities for potential agricultural product exporters outside of China, including the U.S. This dissertation consists of three manuscripts, focusing on two separate but related issues that affect China's agricultural product markets. The first study centers on the modern food retail formats, supermarkets and hypermarkets, which have entered China and are spreading there as fast as (or faster) than anywhere in the world. The explicit objective of this study is to understand how Chinese consumers are responding to the entry and extension of these modern food retail formats, and to identify the underlying factors affecting this response. Different from most previous studies, the effects of potential interrelationships among different food retail formats on consumer choice for shopping termination are taken into account. The results of this study provided empirical evidence that encouraged us to start a long-term research plan to help develop and build markets in China for U.S. agricultural product exports.; The second and third manuscripts focus on another topic--dairy--which has been one of the fastest growing demands for agricultural products in China in recent years. In the second paper, fluid milk is assumed to be a homogenous product. The objective of the study is to understand current fluid milk consumption in urban China, and to identify the underlying determinants. A Tobit model was applied to estimate and test a series of hypotheses since the dataset involves zero-consumption observations. The homogenous product assumption in this paper was relaxed in the third study by designing a choice-based conjoint (CBC) experiment, in which fluid milk is defined by a bundle of attributes and corresponding levels. This study jointly measures the effects of milk-specific attributes and individual-specific characteristics on consumers' preferences and purchasing behavior for fluid milk

Segmentation of Retail Food Store Formats in Qingdao, China

This study empirically estimates a multivariate binary choice model for four categories of food shopping store formats. The results indicate that in the Qingdao market, traditional counter parts such as wet markets and small grocery stores have been dominated by supermarkets and hypermarkets. At the same time, the rapid growth of hypermarkets in Qingdao is significantly challenging current supermarkets in this city, but they do not compete extensively with wet markets and small grocery stores. Further development of various categories of the food shopping store format is linked to store owned characteristics, potential interrelations among existing retail formats, as well as consumers' demographics and shopping habits.Food retail store format, consumer choice, multivariate probit model, China, Agribusiness,

Fluid milk consumption in urban Qingdao, China

This study relates the social-demographic characteristics of urban Chinese consumers to their consumption of fluid milk. A Tobit model is estimated drawing on individual consumer survey data collected in urban Qingdao in China in 2005. The major results of this study indicate that fluid milk consumption in urban Qingdao is much higher compared to China’s national level. The effect of increased income on milk consumption is positive, as expected. The expansion of modern food retailers also appears to play a positive role by facilitating consumers’ fluid milk consumption and influencing their food shopping patterns. The young and old consume significantly more fluid milk than the middle-aged. Health consciousness of the elderly and the openness of youth to new foods appear to be fuelling these consumption patterns. If the findings of this study apply to other urban regions in China, then as urbanisation continues so also will the trend of increasing fluid milk consumption in China.China, fluid milk consumption, market participation, Qingdao, Food Consumption/Nutrition/Food Safety,

Food Processing Degrees: Evidence from Beijing Household Survey

Food Consumption/Nutrition/Food Safety, Teaching/Communication/Extension/Profession,

Are Urban Consumers in China Ready to Accept Biotech Foods?

Based on a large-scale survey conducted in 11 large and small eastern cities in 2002, this study employs ordered probit models to estimate the effects of demographic and socio-economic variables on the likelihood of biotech food acceptance in China. This study also employs a dichotomous choice model to estimate consumers' mean willingness to pay (WTP) for biotech foods, including soybean oil and insect-resistant biotech rice. This survey reaffirms that Chinese urban consumers had a low awareness of biotechnology. Despite the low level of awareness, a great majority of respondents had favorable or neutral attitudes toward biotech foods. Only 5-15 percent was strongly or relatively opposed to biotech foods. Results from the models suggest that mid- and small-city consumers were more supportive of the use of biotech foods than large-city consumers. In addition, consumers with poorer health were less willing to accept biotech foods. Those consumers who trusted the accuracy of media information were also more willing to accept biotech foods. A majority-60 percent or higher-of the respondents were willing to purchase biotech foods without any price discounts. However, about 20 percent would only accept non-biotech foods. Results of the WTP analysis suggest that the likely price premiums that respondents are willing to pay for non-biotech foods averaged around 23.4 percent in the case of soybean oil and 41.5 percent for rice. Mean WTPs estimated from this study are likely to be overstated due in part to the hypothetical nature of the survey data.biotech foods, ordered probit model, consumer acceptance, willingness to pay, China, Consumer/Household Economics, Research and Development/Tech Change/Emerging Technologies, Q11, Q13,

Consumers' Willingness to Pay for Biotech Foods in China

Based on a large-scale consumer survey, this study employs a semi-double-bounded dichotomous choice model to estimate the mean willingness to pay (WTP) for biotech foods in China. The study also accounts for the effects of respondents' characteristics on the probability of purchasing biotech foods and WTP. Analyses focus on biotech soybean oil and insect-resistant biotech rice.Biotech foods, willingness to pay, China, contingent valuation method, semi-double-bounded dichotomous choice model, Consumer/Household Economics,

Got (Safe) Milk? Chinese Consumers’ Valuation for Select Food Safety Attributes

Food safety issues often arise from problems of asymmetric information between consumers and suppliers of food with regards to product-specific attributes or characteristics. Food safety concerns in China are having a drastic impact on consumer behavior, commodity markets, international trade and food security. An additional challenge to the problem of asymmetric information lies in the inherent structure of the governing bodies which oversee food safety and quality. Unlike the United States and other developed countries, China’s food safety is regulated by several government entities with different and sometimes overlapping responsibilities. As a result consumers don’t have a comprehensive food safety and quality system on which to base their economic decisions. In an effort to maintain the food supply of the world’s largest economy safe, China’s government has approved a series of tougher food safety laws and regulations. Although publicized as a tough approach to food safety, it is unclear whether this latest effort will make China’s food safer to eat and improve the country’s image to its agricultural trading partners. While much attention has focused on the problems plaguing China’s food inspection system, little research has been dedicated to analyze consumers’ concerns over food safety. In this paper we measure consumer preferences for select food safety attributes in milk. More specifically we estimate consumer’s willingness to pay for government certification, an independent (third party) certification program, national brand, and a product’s shelf-life using a choice experiment approach. We compare and contrast several modeling strategies to capture heterogeneity of consumer preferences. The data used in this study was collected from a choice experiment administered in seven major metropolitan cities in China, yielding a statistical sample of 6,720 observations. Our results suggest that Chinese consumers have the highest willingness-to-pay for a government certification program, followed by national brand, private certification, and longer shelf-life products. We find that Chinese consumers are very concerned about the safety of the milk they purchase and are willing to pay a high premium to assure that their food is safe. The high level of concern regarding milk safety is linked to recent food safety incidents involving dairy products, most notably the Melamine-adulterated milk products. Heterogeneity of consumer preferences and willingness to pay for the select food safety attributes was found by implementing a latent class logit model based on attitudinal responses as well as a mixed logit model. Although it might appear that Chinese consumers’ confidence on the government is eroding, as reported in the wake of recent food safety scandals, our research found that consumers were less confident on non-government food safety control measures. This result indicates that there is a strong need for the Chinese government to provide adequate food safety and quality control. Our findings call upon the direct involvement of the Chinese government in the food safety system. A more strict monitoring system via certification is necessary. If realized, such government efforts will provide higher welfare to consumers in the short-run and will restore consumers’ trust increasing social welfare in the long run. Policy implications of our results are discussed with particular attention given to food safety and security issues.China, Choice experiment, Mixed logit, Latent class logit, Food safety, Preference heterogeneity, Willingness-to-pay, Food Consumption/Nutrition/Food Safety, International Relations/Trade, Marketing, Q11, Q18,

Understanding the Retirement-Consumption Puzzle through the Lens of Food Consumption − Fuzzy Regression-Discontinuity Evidence from Urban China

This paper attempts to provide an understanding of the widely-documented retirement-consumption puzzle from the perspective of food consumption. Exploiting urban China's "forced" retirement system, we use the legal retirement age cut-off as an instrumental variable for one's retirement status to estimate the causal impacts of retirement on four major aspects of food consumption for males aged 50-70 in urban China: food expenditure, time spent on food acquisition, the quantity, and quality of food consumed. Our fuzzy regression-discontinuity analysis of the China Health and Nutrition Survey data finds that, consistent with the retirement-consumption puzzle, retirement reduces individuals' total food expenditure by 49%. However, retirement barely changes the quantity of food consumption measured by total calorie intakes. Serving to reconcile the differential retirement impacts on elderly males' food expenditure and consumption, retirees are found to substitute their time for money in food acquisition upon retirement. However, they have to sacrifice some quality for quantity of food consumption while smoothing the latter. Given the criteria provided by the Chinese Nutrition Association, retirement negatively affects retirees' diet balance. They consume significantly less food with animal origins (and thus less fat and protein) and more grains (and thus more carbohydrate) upon retirement

Understanding the Retirement-Consumption Puzzle through the Lens of Food Consumption − Fuzzy Regression-Discontinuity Evidence from Urban China

This paper attempts to provide an understanding of the widely-documented retirement-consumption puzzle from the perspective of food consumption. Exploiting urban China's "forced" retirement system, we use the legal retirement age cut-off as an instrumental variable for one's retirement status to estimate the causal impacts of retirement on four major aspects of food consumption for males aged 50-70 in urban China: food expenditure, time spent on food acquisition, the quantity and quality of food consumed. Our fuzzy regression-discontinuity analysis of the China Health and Nutrition Survey data finds that, consistent with the retirement-consumption puzzle, retirement reduces individuals' total food expenditure by 49%. However, retirement barely changes their quantity of food consumed (measure by total calorie intakes). Serving to reconcile the differential retirement impacts on elderly males' food expenditure and consumption, retirees are found to substitute their time for money in food acquisition upon retirement. However, they have to sacrifice some quality for quantity of food consumption while smoothing the latter. Given the criteria provided by the Chinese Nutrition Association, retirement negatively affects retirees' diet balance. They consume significantly less food with animal origins (and thus less fat and protein) and more grains (and thus more carbohydrate) upon retirement

Consumers' Willingness to Pay for Biotech Foods in China : A Contingent Valuation Approach

Based on a large-scale survey, this study employs the contingent valuation method to estimate consumers' willingness to pay (WTP) for biotech foods in China and to account for the effects of respondents' characteristics on the likelihood of purchasing biotech foods and WTP. The survey, covering 1,100 consumers in 11 small-to-large cities (including Beijing and Shanghai) along China's eastern coast, was conducted in the fall of 2002. Although the survey covers eight different kinds of biotech foods, soybean oil made from imported biotech soybeans and insect-resistant biotech rice are the focus. A majority -- about 60% or higher -- of respondents were willing to purchase biotech foods without any price discounts. However, about 20% of them would only accept non-biotech foods. Price premiums that respondents were willing to pay for non-biotech foods averaged about 23-53% for non-biotech soybean oil and 42-74% for non-biotech rice. The lower bound WTP comes closer to the true value in light of hypothetical bias associated with the contingent valuation method.Includes bibliographical reference