An Empirical Analysis on Food Expenditure of Chinese Urban Residents Considering the Changes in Population Structure

Based on the food consumption data released by National Bureau of Statistics of China, this section analyzes the changes in food consumption of Chinese urban residents, laying the basis for subsequent empirical analysis.

Over the years, the total food consumption in China has grown continuously, but at a decreasing growth rate. The structure of food consumption also undergoes constant changes, marking an era of transformation and upgrading. Since 2000, the food expenditure of Chinese urban residents has increased rapidly, while the proportion of food expenditure to total consumption expenditure first declined and then stabilized.  Compared with the past, Chinese urban residents now attach importance to food quality, enjoy convenient access to food products, and boast a great potential of food consumption. These changes are mainly induced by two factors: the urban residents earn more money thanks to economic growth; the fast urbanization has brought a huge influx of migrants to cities.

2.1 Per-capita food expenditure

To begin with, the per-capita food expenditure and Engel coefficient of urban and rural residents were compared in details. As shown in Table 1, the gap between Chinese urban and rural residents in food expenditure has been widened continuously. From 2000 to 2016, the per-capita food expenditure of Chinese urban residents increased from RMB 1,958.3 yuan to RMB 6,762.4 yuan, putting the mean annual rate at RMB 300.3 yuan. Meanwhile, the per-capita food expenditure of Chinese rural residents only grew at a mean annual rate of RMB 152.85 yuan from RMB 820.5 yuan to RMB 3,266.1 yuan.

The significant growth in food consumption of urban residents is accompanied by the deep plunge of Engel coefficient across the country, that is, the improvement of living standards. From 2000 to 2012, the Engel coefficient dropped by 9.88% from 39.18% to 29.3% for urban residents, and by 16.89% from 49.13% to 32.24% for rural residents. Obviously, urban residents have a lower Engel coefficient than their rural counterparts, but the gap is gradually narrowing.

Table 1. Per-capita food expenditure and Engel coefficient of urban and rural residents

2.2 Food categories

The categories of food (e.g. animal food and plant food) consumed by Chinese urban and rural residents are listed in Table 2 below. From which, it can be seen that the per-capita food consumption of urban residents has remained largely stable, while the proportion of animal and plant food being consumed has changed. In 2016, urban residents on average consumed 343.8kg of food, basically the same as the 340.9kg in 2003. From 2000 to 2016, the per-capita consumption of plant food among urban residents remained basically the same, despite a slight growth from 262.7kg to 266.9kg. As for animal food, the per-capita consumption of urban residents grew rapidly from 58.2kg in 2000 to 76.1kg in 2003 and then slowly reached 76.9kg in 2016.

For rural residents, the total food consumption and plant food consumption has both declined, while the consumption of animal food exhibited an upward trend. Specifically, the total food consumption of rural residents dropped from 407.7kg in 2000 to 332.9kg in 2016. In the same period, the per-capita consumptions of animal food and plant food among rural residents respectively increased from 27kg to 51.2kg, and decreased from 380.7kg to 281.7kg.

For urban residents, the share of animal food in the consumption structure has been steadily expanding. In 1981, the urban residents on average consumed 37.1kg of animal food, accounting for 10.28% of all food products being consumed. The proportion was widened to 15.45% in 1993, 22.32% in 2013 and 22.37% in 2016.

Table 2. The categories of food consumed by Chinese urban and rural residents

2.3 Consumption of animal products

(1) Consumption of meat products

Figure 1 shows the per-capita consumption of different meat products among Chinese urban residents.

As shown in Figure 1, pork is the most popular meat product among Chinese urban residents, followed by poultry meat, and beef and mutton. More and more pork has been consumed over the years. On average, each urban resident consumed 16.9kg of pork in 1981, 17.7kg in 1992 and 20.4kg in 2016. Now, pork products contribute half of the total meat consumption. However, the share of pork in the total amount of meat being consumed has been shrinking from 82.44% in 1981, 66.79% in 1992 and 58.45% in 2016.

For urban residents, both the consumption of poultry meat and its proportion to the total consumption of meat have been increasing. The annual consumption of poultry meat per urban resident was merely 1.9kg in 1981, taking up 9.27% of all meat products being consumed. In 1992, each urban resident consumed 5.1kg of poultry meat. By 2016, the annual consumption has grown to 10.2kg, and its proportion to the total consumption of meat to 29.23%.

The consumption of beef and mutton remains low among Chinese urban residents, taking up about 10% of the total meat consumption. The per-capita consumption has been growing rather slowly, from 3.3kg in 2000 to 4.3kg in 2016.

(2) Consumption of other animal products

Figure 2 shows the per-capita consumption of other animal products (e.g. eggs, fish and dairy products) among Chinese urban residents.

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Figure 1. Per-capita consumption of different meat products among Chinese urban residents

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Figure 2. Per-capita consumption of other animal products among Chinese urban residents

As shown in Figure 2, the development of dairy products consumption can be divided into four phases for Chinese urban residents. The annual per-capita consumption grew rapidly from 4.8kg in 1996 to 19.6kg in 2003, remained stable between 17kg and 19kg from 2003 to 2007, decreased from 17.8kg in 2007 to 13.7kg in 2011 due to the melamine incident, and rebounded thereafter to 17.1kg in 2016.

For Chinese urban residents, the annual mean consumption of fish increased all the way to 14.8kg in 2016, and that of fresh eggs grew from 5.1kg in 1981 to 11.1kg in 1997 and remained at about 10kg ever since.

2.4 Consumption of plant products

The per-capita consumption of plant products among Chinese urban residents is illustrated in Figure 3 below. Note that the term “Grains” also covers beans and potatoes after 2012, due to a revision by the National Bureau of Statistics in 2013.

In general, the annual plant food consumption per urban resident has remained basically stable. From 1993 to 2016, the per-capita plant food consumption increased slightly from 264.4kg to 266.9kg. In the same period, the proportion of plant food consumption in total food consumption dropped from 84.55% to 77.63%. Obviously, plant food continuous to dominate the food consumption of Chinese urban residents.

On the categories of plant food, great changes have taken place in the consumption of grains, fresh vegetables and fresh melons since the reform and opening-up in 1978. The annual consumption of grains per urban resident decreased by nearly half from 145.4kg in 1981 to 79.7kg in 2001, and remained stable around 80kg from 2002 to 2012. The annual consumption of fresh vegetables per urban resident dropped from 152.3kg in 1981 to 116.5kg in 1995, and remained stable ever since. The annual consumption of fresh melons per urban resident was stabilized after increasing from 21.2kg in 1981 to 57.5kg in 2000. The per-capita consumption of edible oils remained at a low level, growing from 8.2kg in 2000 to10.6kg in 2016.

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Figure 3. The per-capita consumption of plant products among Chinese urban residents

4.1 Conceptual framework and model setting

The food expenditure of each urban household can be expressed as:

$E=f(Y, P, D, Z)+u$   (1)

where, E is the household food expenditure; Y is the household income; P is the price index of various food products; D is the family structure variable; Z is the other influencing factors (i.e. residence, family education level, the number of family members working in state-owned enterprises, the size of the local city, and the region variable) on household food consumption; u is a random error term. The food expenditure function can be rewritten as:

$\ln E=\beta_{0}+\beta_{1} \ln I+\beta_{2}(\ln I)^{2}$$+\beta_{3} \ln P+\beta_{4} F A E S+\beta_{5} Z+\mu$  (2)

where, FAES is the age structure index of each household; $\beta_{0}$,…, $\beta_{5}$are unknown parameters. The meaning of the other parameters is the same as that in Eq. (1). Eq. (2) can be solved by the least squares method. The FAES can be expressed as:

$\begin{aligned} F A E S=c_{1} \times V A &+c_{2} \times V B+c_{3} \times V C+c_{4} \times V D \\ &+c_{5} \times V E+c_{6} \times V F+c_{7} \times V G \\ &+c_{8} \times V H+c_{9} \times V I+e_{11} \times V J \\ &+e_{21} \times V K+e_{31} \times V L+e_{41} \times V M \\ &+e_{12} \times V N+e_{22} \times V O+e_{32} \times V P \\ &+e_{42} \times V Q \end{aligned}$

where, VA, VB…, VQ are family structure variables about the number and age of family members. In each family, males between 35 and 40 were taken as the standard members and assigned the adult equivalent value of 1, i.e. VC c₃=1. Then, each of the other family members was converted to standard members, and assigned a corresponding adult equivalent value. This method is called the adult equivalent scales method (Model 1).

4.2 Data analysis

Our research uses the 2009 urban household survey data released by the National Bureau of Statistics [14-16]. Six provincial administrative regions (hereinafter referred to as provinces), namely, Hebei, Guangdong, Henan, Jilin, Sichuan and Xinjiang, were selected to represent the northern, southern, central, north-eastern, southwestern and northwestern regions of China, respectively. In total, 10,462 urban households were randomly selected from these provinces, including 1,935 from Hebei, 2,371 from Guangdong, 1,602 from Henan, 1,222 from Jilin, 2,246 from Sichuan, and 1,086 from Xinjiang.

All these households meet the definition of “urban households” in Chinese laws and regulations: non-agricultural households with permanent residence in urban districts or neighborhood committees. Here, the samples also cover the agricultural households with permanent residence in these areas, as well as the agricultural or non-agricultural households without permanent residence but having lived in urban districts or neighborhood committees for more than half a year.

In general, 15.3% of the sample households are from Henan, 18.5% from Hebei, 11.7% from Jilin, 22.7% from Guangdong, 21.5% from Sichuan and 10.4% from Xinjiang. The proportion of each province is above 10%, an evidence for the rationality of sample selection. For comparison, Xinjiang was taken as the reference province in our research.

The food products consumed by urban households were divided into ten main categories: cereals (rice and flour), edible oils (animal oil and vegetable oil), meat (pork, beef, mutton, other meats and meat products), poultry meat (chicken, duck meat, other poultry meats and poultry meat products), eggs (fresh eggs and egg products), aquatic products (fish and shrimp), dairy products (fresh dairy products, milk powder, yogurt and other dairy products), vegetables (fresh vegetables, dried vegetables and vegetable products), fruits (fresh fruits, fresh melons, dried fruits and dried melons), grains (starch, potato, dried beans and pastries).

4.2.1 Expenditure on each food type

Table 6 shows the per-capita food expenditure of the sample households in 2009. It can be observed that the urban households in Guangdong on average spent the most (RMB 9,755.37 yuan) on food products, while those in Henan spent the least (RMB 45,896.695 yuan). The expenditures of urban households in different provinces were compared on each type of food.

The urban households in Guangdong on average spent RMB 1,248.980 yuan on cereals, more than those in any other province, while those in Hebei spent RMB 790.532 yuan on cereals, fewer than those in any other province. The urban households in Guangdong also dwarfed those in other provinces in the per-capita expenditure on meat, poultry meat, aquatic products, vegetables, fruits and grains. Specifically, the meat expenditure of Guangdong urban households was RMB 3,412.079 yuan, RMB 920.926 yuan higher than that of the second-ranking Sichuan urban households; the poultry meat expenditure of Guangdong urban households was RMB 1,486.778 yuan, RMB 739.724 yuan higher than that of the second-ranking Sichuan urban households; the aquatic products expenditure of Guangdong urban households was RMB 1,680.986 yuan, RMB 1,192.759 yuan higher than that of the second-ranking Hebei urban households.

On edible oils, Sichuan and Jilin were respectively at the top and bottom in the ranking of expenditure per urban resident. The per-capita expenditure of Sichuan urban households stood at RMB 4,87546 yuan, while that of Jilin urban households was only RMB 302.085 yuan. On eggs, Hebei urban households spent an average of RMB 302.085 yuan, more than that of urban households in any other province.

Table 6. Urban household expenditure on different types of food