Effects of Rationing on Consumer Behaviour in Chinese Urban Households

Paper number: 99/02

Paper date: November 1998

Year: 1999

Paper Category: Discussion Paper


Hua Ding
Visiting Scholar, University of Exeter, UK


Kaddour Hadri
City University, London, UK


This paper examines the consequences of housing rationing on the consumption behaviour of Chinese urban households in Jiangsu province during the years 1992 - 1993.

The results, confirming previous findings, show that rationing of housing has an impact on the demand for unrationed goods. In particular, Chinese urban households would continue to increase their demand for nonstaple foods. An effort to alleviate housing rationing would certainly reduce the distortion to market efficiency. But, in the short term, it means some hardship for low income households.

JEL Classification Nos: D12, O12
Keywords: Consumer behaviour under rationing, Linear Expenditure System

Corresponding Author: Hua Ding, School of International Business, Nanjing University, Nanjing 210093, China.


1 We would like to thank Professor G.D.A. Phillips for many valuable suggestions and for his continuous support.