Improving Estimates of Inequality and Poverty from Urban China's Household Income and Expenditure Survey
AbstractIn urban China the Household Income and Expenditure Survey requires respondents to keep a daily expenditure diary for a full 12-month period. This onerous reporting task makes it difficult to recruit households into the survey, compromising the representative nature of the sample. In this article we use data on the monthly expenditures of households from two urban areas of China to see if data collection short-cuts, such as extrapolating to annual totals from expenditure reports in only some months of the year, would harm the accuracy of annual expenditure, inequality and poverty estimates. Our results show that replacing 12-month diaries with simple extrapolations from either one, two, four or six months would cause a sharp increase in estimates of annual inequality and poverty. This finding also undermines international comparisons of inequality statistics because no country other than China uses such comprehensive 12-month expenditure records. But a corrected form of extrapolation, based on correlations between the same householdâs expenditures in different months of the year, gives much smaller errors in estimates of inequality and poverty.
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Bibliographic InfoArticle provided by International Association for Research in Income and Wealth in its journal Review of Income and Wealth.
Volume (Year): 49 (2003)
Issue (Month): 1 (03)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6586
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Other versions of this item:
- Gibson, John & Huang, Jikun & Rozelle, Scott, 2001. "Improving Estimates Of Inequality And Poverty From Urban China'S Household Income And Expenditure Survey," Working Papers 11989, University of California, Davis, Department of Agricultural and Resource Economics.
- John Gibson & Jikun Huang & Scott Rozelle, 2002. "Improving Estimates of Inequality and Poverty From Urban China’s Household Income and Expenditure Survey," Working Papers in Economics 02/01, University of Waikato, Department of Economics.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
- Grootaert, Christiaan, 1994. "Poverty and basic needs fulfilment in Africa during structural change: Evidence from Cote d'Ivoire," World Development, Elsevier, vol. 22(10), pages 1521-1534, October.
- Ravallion, Martin & Chen, Shaohua, 1999. " When Economic Reform Is Faster Than Statistical Reform: Measuring and Explaining Income Inequality in Rural China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(1), pages 33-56, February.
- Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-82, December.
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