Advanced Search
MyIDEAS: Login to save this paper or follow this series

Regional Price Differences in Urban China 1986-2001: Estimation and Implication

Contents:

Author Info

  • Gong, Cathy Honge

    ()
    (University of Canberra)

  • Meng, Xin

    ()
    (Australian National University)

Abstract

Despite the intensive efforts made by economists to examine regional income inequality in China, limited attention has been paid to disentangle the contribution of regional price differentials. This paper examines regional price differential in urban China over the period 1986 to 2001. Spatial Price Index (SPI) is normally calculated using the Basket Cost Method, which defines a national basket and measures price variation of this common basket across different regions. The weakness of this method is that it arbitrarily assumes consumers’ preferences and has a strong reliance on good regional level price data, which are often not available. This paper adopts the Engel’s curve approach to estimate a Spatial Price Index for different provinces. The SPI obtained from the Engel’s curve approach indicates larger regional price variations than those obtained from the Basket Cost method. Further, regional price variations in urban China increased significantly during the late 1980s to early 1990s, stabilized at a relatively high level during the mid to end 1990s. Adjusting for the regional price variations our finding suggests that regional income inequality increased the most between the late 1980s and early 1990s, and stabilized in the mid 1990s, which contradicts previous findings using unadjusted income.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp3621.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3621.

as in new window
Length: 60 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3621

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: spatial price index; Engel’s curve; income inequality; China;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Cook, Jonathan Aaron, 2013. "Does Chinese Inflation Understate Cost of Living?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150571, Agricultural and Applied Economics Association.
  2. Angus Deaton & Alan Heston, 2008. "Understanding PPPs and PPP-based national accounts," Working Papers, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies. 1120, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  3. Xin Meng & Kailing Shen & Sen Xue, 2010. "Economic Reform, Education Expansion, and Earnings Inequality for Urban Males in China, 1988-2007," CEPR Discussion Papers, Centre for Economic Policy Research, Research School of Economics, Australian National University 639, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  4. Bettina Aten & Marshall Reinsdorf, 2010. "Comparing the Consistency of Price Parities for Regions of the U.S. in an Economic Approach Framework," BEA Papers, Bureau of Economic Analysis 0098, Bureau of Economic Analysis.
  5. Robert J. Hill & Iqbal A. Syed, 2012. "Accounting for Unrepresentative Products and Urban-Rural Price Differences in International Comparisons of Real Income: An Application to the Asia-Pacific Region," Graz Economics Papers, University of Graz, Department of Economics 2012-07, University of Graz, Department of Economics.
  6. Ingvild Almas & Anders Kjelsrud & Rohini Somanathan, 2013. "A Behaviour-Based Approach To The Estimation Of Poverty In India," Working papers, Centre for Development Economics, Delhi School of Economics 226, Centre for Development Economics, Delhi School of Economics.
  7. Riccardo Massari & M. Grazia Pittau & Roberto Zelli, 2010. "Does regional cost-of-living reshuffle Italian income distribution?," Working Papers, ECINEQ, Society for the Study of Economic Inequality 166, ECINEQ, Society for the Study of Economic Inequality.
  8. Chao Li & John Gibson, 2013. "Spatial Price Differences and Inequality in China: Housing Market Evidence," Working Papers in Economics, University of Waikato, Department of Economics 13/06, University of Waikato, Department of Economics.
  9. Robert J. Hill & Iqbal Syed, 2010. "Improving International Comparisons of Real Output: The ICP 2005 Benchmark and its Implications for China," Discussion Papers, School of Economics, The University of New South Wales 2010-25, School of Economics, The University of New South Wales.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3621. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.