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Burgess (2004) Asset Redistribution price band between calorie buying and selling prices widens with poorer infrastructure, less competitive marketing system (e.g. procurement), poorer information Fow, greater price risk expect price band to be wide in transition country like China but to dimin- ish with market development “shadow price” of calories ( ˜ p c ) equilibrates demand and supply own price advantage – households with more land face lower prices for the calories they consume than households with less land Result 2: In incomplete food market settings access to land can affect calorie demand though two distinct mechanisms. (i) via an income effect (this is the whole effect in the perfect markets case). (ii) via an own price effect. x c ¯ A = x c y · y ¯ A + x c ˜ p c · ˜ p c ¯ A Result 3: In incomplete food market settings the own price effect of having access to land is unambiguously positive. Increasing access to land lowers the shadow
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Unformatted text preview: price of calories and increases demand for calories. Cross-price Effects Result 4: With an incomplete food market and controlling for the income effect we would expect increasing access to land, which lowers the shadow calorie price, to have a negative impact on non-food consumption and a positive impact on food consumption. x m A = x m y y A + x m p c p c A Result 5: Controlling for the income effect we would expect increasing access to land, by lowering the shadow price of food, to have a negative impact on purchased calorie consumption and a positive effect on own produced calorie consumption. Development Economics, LSE Summer School 2007 90...
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