Analyzing the impact of food safety information on food demand in China

What are Chinese consumers’ reactions to food safety information provided by mass media? This study analyses the impact of food safety information on food demand in urban China, underscoring food price elasticities and expenditure elasticities by categories.

The authors state that a better understanding of consumers’ responses to food safety information could be important to both policy analysts and the food industry. In addition, the Chinese middle-class consumers market looks very attractive for foreign food companies, taking into consideration the sales of branded products, such as baked goods, soft drinks, fast food and alcohol.

The study shows the following findings: 

• the increase in buying power in China has been accompanied by an increase in food safety awareness; the demand for high quality and safer food has been increasing 
• urban Chinese consumer food demand has been influenced by food safety information from daily newspapers and GM labeling policy
• the expenditure elasticities of milk and most meat product were high and net substitution was found among most food products
• all of the food safety effects were negative in the category of meat, some of the effects were negative in oil and eggs, and the effects were positive in the others 
• this indicates that the meat consumption in urban China is more sensitive to the related food safety information