Abstract

In this study, we have a research on impacts given by grain price fluctuation on customers in inflation period. In the context of inflation, grain price fluctuation gives immediate impact on consumption level and consumption behaviors as well as welfares of customers whose. However, the degree of impacts on customer whose incomes varies is different. The impacts given by the rise of grain price on consumption structure and welfare level of the lower income group are the most great. Because of the convergence of the food price and grain price, the rise of the grain price results in rise of the food price, further increasing the living cost of the lower income group. Under circumstance of steady income, purchase power of the lower income group gets weak and they go into the abject poverty. Simultaneously, 25% rise of the grain price will lead to nearly 2.8% rural population goes back to the poverty state. The rise of the grain price will also results in price rise of the products of animal husbandry as well as articles for daily use, for such products take grain as production materials or raw materials. As a result, price of other products goes up and the living cost undoubtedly gets higher, increasing salaries of workers, which in return makes the labor cost gets higher and further increases the grain price. Similarly, the labor cost increase makes the production cost of animal husbandry as well as articles for daily use get higher, finally making the end prices of such products increase. The inflation therefore gets worse and the consumption level and welfare get lower.

Keywords:

Fluctuation, grain price, inflation, lower income group,

References

Competing interests

The authors have no competing interests.

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Copyright

The authors have no competing interests.