First Advisor

Kuan-pin Lin

Date of Publication


Document Type


Degree Name

Doctor of Philosophy (Ph.D.) in Systems Science: Economics


Systems Science




Consumption (Economics) -- China -- Econometric models, China -- Economic conditions -- 1949- -- Econometric models, Consumer goods -- China



Physical Description

2, viii, 168 leaves: ill. 28 cm.


This is an in-depth study of the structural change and transition of the Chinese consumer goods market from 1954 to 1991 using disequilibrium econometric methodology. The model for the Chinese consumer goods market is based on the Portes-Winter disequilibrium model for centrally planned economies (1980). The demand function is derived from the Houthakker-Taylor savings function. The supply function is composed of approximations to the government's long-term and short-term plans. The transaction quantity in the market is defined as the smaller of effective demand and supply. Using the traditional global fitting method, three models are evaluated: one model that assumes no structural change, and two models that assume structural change. The estimations show that the structures of the demand and supply functions of the Chinese consumer goods market have changed since the economic reform in 1980. An innovative non-parametric method of locally weighted optimization is applied to further test the variations in model parameters during the period between 1954 and 1991 without assuming explicit functional forms of demand and supply. The estimation results show that the Chinese consumer goods market fits the Portes-Winter model well in the earlier years. The results confirm that the structures of demand and supply functions have changed since the economic reform. In the late 1980's, the Chinese consumer goods market is shown to have shifted away from a pure centrally planned system. Other main conclusions of this study include, first, that chronic shortage does not exist in the Chinese consumer goods market from 1954 to 1991. Second, a rigid price level has not caused the market to be persistently in disequilibrium. Third, the classical disequilibrium model of consumer goods market in centrally planned economies does not fit the Chinese consumer goods market in the later years.


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