Trade cost reductions, food affordability, and child underweight: a difference-in-differences analysis of China’s green channel policy

This study uses eight waves of data from the China Health and Nutrition Survey from 1989 to 2009 to examine the effect of agricultural trade cost reductions on child underweight. We exploit China’s Green Channel policy, which exempted vehicles transporting fresh agricultural products from tolls on selected trunk-road corridors, and estimate a difference-in-differences model that compares changes in child underweight before and after the policy across counties with different pre-policy access to Green Channel toll stations. The identification relies on the assumption that, absent the policy, counties with different pre-policy access would have followed similar trends in child underweight. The results show that a one-standard-deviation increase in Green Channel exposure reduces the probability of child underweight by 2.59% points. The effects are more pronounced among younger children and those living in rural and low-GDP counties. Mechanism analysis shows that the policy lowers community-level pork and milk prices, increases children’s consumption of meat, eggs, and dairy products, and raises calorie, protein, and fat intake per kilogram of body weight. These findings suggest that reducing food trade costs can improve child nutrition by lowering the prices of nutrient-dense foods and improving food affordability.