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The Cost of Living in China: Implications for Inequality and Poverty

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  • Almås, Ingvild

    (Norwegian School of Economics and Business Administration)

  • Johnsen, Åshild Auglænd

    (University of Stavanger)

Abstract

China’s economic development in recent decades has been tremendous, but subject to debate. This paper calculates regional prices that make incomes comparable across both time and space using the Engel-curve approach. Incomes are adjusted using these price indices, providing new estimates of inequality and poverty development. Our findings contrast with measures based on the official consumer price indices (CPIs) – in a time characterized by high economic growth, we find a larger increase in inequality and a more moderate poverty reduction than what is indicated by the CPI-adjusted measures.

Suggested Citation

  • Almås, Ingvild & Johnsen, Åshild Auglænd, 2013. "The Cost of Living in China: Implications for Inequality and Poverty," Memorandum 06/2013, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2013_006
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    Cited by:

    1. Zheng Song & Kjetil Storesletten & Yikai Wang & Fabrizio Zilibotti, 2015. "Sharing High Growth across Generations: Pensions and Demographic Transition in China," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 1-39, April.
    2. Emi Nakamura & Jón Steinsson & Miao Liu, 2016. "Are Chinese Growth and Inflation Too Smooth? Evidence from Engel Curves," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(3), pages 113-144, July.
    3. Chamon, Marcos & de Carvalho Filho, Irineu, 2014. "Consumption based estimates of urban Chinese growth," China Economic Review, Elsevier, vol. 29(C), pages 126-137.
    4. Ralph W. Huenemann, 2014. "The World Bank and China: Future Prospects," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 251-256, January.
    5. Jeffrey Zax, 2016. "Provincial valuations of human capital in urban China, inter-regional inequality and the implicit value of a Guangdong hukou," ERSA conference papers ersa16p693, European Regional Science Association.

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    More about this item

    Keywords

    China; Poverty; Inequality; CPI;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F01 - International Economics - - General - - - Global Outlook

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