Demand for milk quantity and safety in urban China: evidence from Beijing and Harbin

Urban households account for most of the milk consumption in China, but their consumption is hampered by safety concerns. Using survey data collected in Beijing and Harbin in 2010, this paper simultaneously analyses urban households' milk consumption using a multiple linear model and their willingness-to-pay for milk safety using an ordered choice model. The results of this study show that as income increases, urban households consume more milk and are willing to pay a higher premium for milk safety. Modern food marketing channels play a positive role in stimulating milk consumption and building consumers' confidence in milk safety. The growth in the elderly population influences milk consumption positively, but their demand for milk safety is negatively affected by higher price. The combined analysis of households' demand for milk quantity and safety may be useful to the Chinese government in promoting the development of the domestic milk industry and to dairy firms in exploring the milk market in China.