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Urban-Rural Consumption Inequality in China from 1988 to 2002: Evidence from Quantile Regression Decomposition

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Author Info
Qu, Zhaopeng (Frank) () (Beijing Normal University)
Zhao, Zhong () (Renmin University of China)

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Abstract

One of the most notable social phenomena in China is the large urban-rural disparity. There are many studies of it, but most of them focus on income or earnings inequality. In this paper, we investigate the consumption disparity between urban and rural households in China from 1988 to 2002. Our results suggest that low quantiles are associated with large consumption disparity. The price effect is the dominant factor for the urban-rural consumption disparity. This disparity increased significantly, both at mean and at every quantile, from 1988 to 2002. However, most of the increase happened from 1988 to 1995, and this increase was mainly from the higher growth rate of urban household consumption. Our results also suggest that rural-urban migration and improvement of the rural educational level are very helpful in reducing urban-rural disparity.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3659.

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Length: 58 pages
Date of creation: Aug 2008
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Handle: RePEc:iza:izadps:dp3659

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Related research
Keywords: inequality; consumption; quantile regression decomposition; China;

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Find related papers by JEL classification:
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Statistical Simulation Methods

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