The Effectiveness of Government Regulation and Demand for Food Safety Degree——Evidence from China

It is unreasonable to attribute the food safety problem solely to ineffective government regulation or to expect that strengthening regulation on the supply side will resolve the issue. This paper introduces the concept of “effective demand for food safety degree” from the perspective of consumer demand for safe food. It acknowledges a significant segment of consumers, many of whom are low-income, and highlights the hierarchical differences in the demand for food safety degree across various consumer groups. Consequently, the paper constructs a model of enterprise competition that takes into account differences in consumer income. This model illustrates an equilibrium where both low-quality and high-quality food coexist in the market. Furthermore, it analyzes the impacts of government regulation, consumer income levels, and income disparity on the overall degree of food safety in the market. Based on this model, the paper conducts empirical analyses using data from food safety incidents. The findings suggest that one major reason for the food safety problems in China at present is that a relatively large number of low-income consumers exhibit low effective demand for food safety degree. This situation creates a persistent demand or market for low-quality or substandard food, resulting in inefficiencies and malfunctions within government regulation. Enhanced government regulation can only have a more positive impact when the general income level of the population rises.