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Changes in regional inequality in rural China: decomposing the Gini index by income sources

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  • Wan, Guang Hua

Abstract

A new method is proposed to decompose inequality changes as measured by the Gini index into structural effects, real inequality effects and interactive effects. Application of the method to updated Chinese data reveals that structural effects represent the driving force underlying the increasing trend in regional income inequality in rural China. Policy implications are explored. In addition to these contributions, considerable efforts are made to construct the income data used in the article. Pitfalls in measuring income inequality in rural China are discussed.

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Bibliographic Info

Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 45 (2001)
Issue (Month): 3 (September)
Pages:

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Handle: RePEc:ags:aareaj:117472

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Keywords: Community/Rural/Urban Development;

References

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  1. Basmann, R. L. & Hayes, K. J. & Slottje, D. J. & Johnson, J. D., 1990. "A general functional form for approximating the Lorenz curve," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 77-90.
  2. Dennis Tao Yang, 1999. "Urban-Biased Policies and Rising Income Inequality in China," American Economic Review, American Economic Association, vol. 89(2), pages 306-310, May.
  3. Hussain, Athar & Lanjouw, Peter & Stern, Nicholas, 1994. "Income inequalities in China: Evidence from household survey data," World Development, Elsevier, vol. 22(12), pages 1947-1957, December.
  4. Nygard, Fredrik & Sandstrom, Arne, 1989. "Income inequality measures based on sample surveys," Journal of Econometrics, Elsevier, vol. 42(1), pages 81-95, September.
  5. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
  6. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
  7. Knight, John & Song, Lina, 1993. "The Spatial Contribution to Income Inequality in Rural China," Cambridge Journal of Economics, Oxford University Press, vol. 17(2), pages 195-213, June.
  8. Dagum, Camilo, 1990. "On the relationship between income inequality measures and social welfare functions," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 91-102.
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Citations

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Cited by:
  1. Wan, Guanghua & Zhang, Xiaobo, 2006. "Rising inequality in China," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 651-653, December.
  2. Wan, Guanghua & Zhou, Zhangyue, 2004. "Income Inequality in Rural China: Regression-based Decomposition Using Household Data," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Gravier-Rymaszewska, Joanna & Tyrowicz, Joanna & Kochanowicz, Jacek, 2010. "Intra-provincial inequalities and economic growth in China," Economic Systems, Elsevier, vol. 34(3), pages 237-258, September.
  4. Joshi, Niraj Prakash & Maharjan, Keshav Lall & Piya, Luni, 2010. "Poverty and Food Insecurity in Nepal A Review," MPRA Paper 35387, University Library of Munich, Germany.
  5. Gu, Xinhua & Tam, Pui Sun, 2013. "The saving–growth–inequality triangle in China," Economic Modelling, Elsevier, vol. 33(C), pages 850-857.
  6. Joshi, Niraj Prakash & Maharjan, Keshav Lall, 2008. "A Study on Rural Poverty Using Inequality Decomposition in Western Hills of Nepal: A Case of Gulmi District," MPRA Paper 35386, University Library of Munich, Germany.
  7. Zhang Yuan & Guanghua Wan & Niny Khor, 2012. "The rise of middle class in rural China," China Agricultural Economic Review, Emerald Group Publishing, vol. 4(1), pages 36-51, February.
  8. Magalhaes, Eduardo & Diao, Xinshen, 2009. "Productivity convergence in Brazil: The case of grain production," IFPRI discussion papers 857, International Food Policy Research Institute (IFPRI).
  9. Wan, Guanghua, 2006. "Poverty Accounting by Factor Components: With an Empirical Illustration Using Chinese Data," Working Paper Series RP2006/63, World Institute for Development Economic Research (UNU-WIDER).
  10. Guanghua Wan & Ming Lu & Zhao Chen, 2007. "Globalization And Regional Income Inequality: Empirical Evidence From Within China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 35-59, 03.
  11. Maharjan, Keshav Lall & Joshi, Niraj Prakash, 2007. "A Poverty Analysis in Baitadi District, Rural Far Western Hills of Nepal: An Inequality Decomposition Analysis," MPRA Paper 35384, University Library of Munich, Germany.
  12. Wan, Guanghua, 2002. "Regression-based Inequality Decomposition: Pitfalls and a Solution Procedure," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  13. Wan, Guang Hua, 2005. "Convergence in food consumption in Rural China: Evidence from household survey data," China Economic Review, Elsevier, vol. 16(1), pages 90-102.

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