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Abstract

An analytical framework to assess the effects of changing income and socio-demographic distributions on aggregate food demand functions in transitional economies is presented. Ignoring such distributional effects can lead to biased estimates of aggregate demand elasticities. The proposed method is applied to Chinese urban household expenditure survey data. The results indicate that the drastic distributional changes that have occurred in China have had notable effects on estimated demand elasticities for both food and non-food commodity groups.

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