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Explaining the Poverty Difference between Inland and Coastal China: A Regression-based Decomposition Approach

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  • Guanghua Wan
  • Yin Zhang

Abstract

This study proposes a decomposition framework for quantifying contributions of the determinants of poverty to spatial differences or temporal changes in poverty. This framework is then applied to address the issue why poverty incidence is higher in inland than in coastal China. The empirical application requires household or individual income observations which, generally speaking, are not available. Thus, a data-generation method developed by Shorrocks and Wan is introduced to construct such observations from grouped income data. It is found that inland China is poorer than coastal China, mainly due to lower efficiency in resource utilization rather than less endowment of resources. Also, trade became poverty-reducing in coastal China in the late 1990s but remained poverty-inducing in inland China. Policy implications are briefly discussed. Copyright � 2008 The Authors.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 12 (2008)
Issue (Month): 2 (05)
Pages: 455-467

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Handle: RePEc:bla:rdevec:v:12:y:2008:i:2:p:455-467

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Cited by:
  1. Muqun Li & Ian Coxhead, 2011. "Trade and Inequality with Limited Labor Mobility: Theory and Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 15(1), pages 48-65, 02.
  2. Somnath Chattopadhyay & Amita Majumder & Hasanur Jaman, 2014. "Decomposition of inter-regional poverty gap in India: a spatial approach," Empirical Economics, Springer, vol. 46(1), pages 65-99, February.

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