Demographic and Economic Growth Changes In China and Their Impact on Demand for Textiles: Comparison of Linear Expenditure System, Almost Ideal Demand System and LinQuad Demand System Using Micro Data

Abstract:  With economic growth rate in China sustaining at more than 8% per year in the recent years, living standards for China’s vast population has gradually increased and has changed structure of consumption patterns among Chinese households. This paper attempts to evaluate the effects of economic and demographic changes in consumption pattern by employing conventional demand models (linear expenditure, AIDS, LinQuad) using household survey data.   This study will specifically look in the impact of income distribution, regional economic growth rate, urban migration and population aging on the Chinese textile market through a sample survey data recently collected by U.S. Cotton Council International.   This in turn will enable us determine which model performs best in terms of its ability to estimate the true effects of determinants on demand for textiles.