Three Essays on Local Food, Population Aging and Pension Reform

Abstract

The first chapter investigate the influence of the “local” attribute on food prices. After “buying organic”, “buying local” has become the latest trend in food marketing. However, it remains unclear whether consumers are paying a price premium for “local.” This paper aims to start filling the research gap by exploring the local price premium of packaged lettuce products in the Honolulu market. Hedonic approach and scanner data obtained from actual market transactions are used to study consumers’ revealed preference. Contrary to the positive willingness to pay for local food widely reported in previous studies, no price premium is found for local lettuce in the Hawaii market. The second chapter utilizes the 2011 Nielsen scanner data for the Honolulu fresh tomato market to explore the existence of price premium for local food. Hedonic analysis is conducted to delineate the price impact of the local attribute. Contrary to the widely perceived local price premium in the consumer preference literature, mixed results of price premiums and discounts are discovered for local tomato products. Additional investigation suggests that the prices of local tomatoes are likely influenced by seasonal output fluctuation. The limited market distribution capacity facing local producers may have contributed further to the retail discounting. The third chapter utilizes an overlapping generation model to explore the welfare consequences of cohort heterogeneity in education and its relative importance compared to population growth and pension reform in the context of population aging. I draw evidence from China’s experience of the Cultural Revolution and the following economic transition. Two sources of cohort differences are identified: educational attainment due to the disruption by the Cultural Revolution, and differentials in labor market returns to education during the subsequent economic development. Such educational disparity have likely resulted in pronounced labor income gap across cohorts. I conduct counterfactual experiments to evaluate the separate impacts of the three structural elements. The results indicate that quantitative impact of cohort educational heterogeneity is not significant compared to population growth rate and pension policy.