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

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  • Qu, Zhaopeng (Frank)

    (Nanjing University)

  • Zhao, Zhong

    (Renmin University of China)

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.

Suggested Citation

  • Qu, Zhaopeng (Frank) & Zhao, Zhong, 2008. "Urban-Rural Consumption Inequality in China from 1988 to 2002: Evidence from Quantile Regression Decomposition," IZA Discussion Papers 3659, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3659
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    References listed on IDEAS

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    Cited by:

    1. Xia, Qingjie & Li, Shi & Song, Lina, 2017. "Urban Consumption Inequality in China, 1995–2013," IZA Discussion Papers 11150, Institute of Labor Economics (IZA).
    2. Regmi, Madhav & Paudel, Krishna & Khanal, Aditya & Koirala, Krishna H., 2015. "Consumption Expenditure Pattern Of Rural And Urban Households In Namibia: A Quantile Regression Approach," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196689, Southern Agricultural Economics Association.
    3. José Pulido & Tomasz Swiecki, 2019. "Barriers to Mobility or Sorting? Sources and Aggregate Implications of Income Gaps across Sectors and Locations in Indonesia," 2019 Meeting Papers 1298, Society for Economic Dynamics.
    4. Peng Bin & Andrea Fracasso, 2017. "Regional Consumption Inequality in China: An Oaxaca-Blinder Decomposition at the Prefectural Level," Growth and Change, Wiley Blackwell, vol. 48(3), pages 459-486, September.
    5. Qingjie Xia & Lina Song & Shi Li & Simon Appleton, 2014. "The effect of the state sector on wage inequality in urban China: 1988--2007," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 12(1), pages 29-45, February.
    6. Lee, Jin Kook, 2017. "China's Consumer Market: Growth, Changes, and Korea's Opportunities," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 39(3), pages 19-41.
    7. Amartya Lahiri & Viktoria Hnatkovska, 2014. "Structural Transformation and the Rural-Urban Divide," 2014 Meeting Papers 746, Society for Economic Dynamics.

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    More about this item

    Keywords

    inequality; consumption; quantile regression decomposition; China;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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