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Changes in regional inequality in rural China: decomposing the Gini index by income sources

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  • Wan, Guang Hua

Abstract

A new method is proposed to decompose inequality changes as measured by the Gini index into structural effects, real inequality effects and interactive effects. Application of the method to updated Chinese data reveals that structural effects represent the driving force underlying the increasing trend in regional income inequality in rural China. Policy implications are explored. In addition to these contributions, considerable efforts are made to construct the income data used in the article. Pitfalls in measuring income inequality in rural China are discussed.

Suggested Citation

  • Wan, Guang Hua, 2001. "Changes in regional inequality in rural China: decomposing the Gini index by income sources," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), September.
  • Handle: RePEc:ags:aareaj:117472
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    References listed on IDEAS

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    1. Dennis Tao Yang, 1999. "Urban-Biased Policies and Rising Income Inequality in China," American Economic Review, American Economic Association, vol. 89(2), pages 306-310, May.
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    Citations

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    Cited by:

    1. Wan, Guanghua & Zhou, Zhangyue, 2004. "Income Inequality in Rural China: Regression-based Decomposition Using Household Data," WIDER Working Paper Series 051, World Institute for Development Economic Research (UNU-WIDER).
    2. UNDP Regional Bureau for Africa, "undated". "The Dynamics of Income Inequality in a Dualistic Economy: Malawi over 1990-2011," UNDP Africa Policy Notes 2017-13, United Nations Development Programme, Regional Bureau for Africa.
    3. Guanghua Wan & Ming Lu & Zhao Chen, 2007. "Globalization And Regional Income Inequality: Empirical Evidence From Within China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 35-59, March.
    4. Wan, Guanghua, 2002. "Regression-based Inequality Decomposition: Pitfalls and a Solution Procedure," WIDER Working Paper Series 101, World Institute for Development Economic Research (UNU-WIDER).
    5. Guanghua Wan & Zhangyue Zhou, 2005. "Income Inequality in Rural China: Regression-based Decomposition Using Household Data," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 107-120, February.
    6. Gu, Xinhua & Tam, Pui Sun, 2013. "The saving–growth–inequality triangle in China," Economic Modelling, Elsevier, vol. 33(C), pages 850-857.
    7. Wan, Guang Hua, 2005. "Convergence in food consumption in Rural China: Evidence from household survey data," China Economic Review, Elsevier, vol. 16(1), pages 90-102.
    8. Zhang Yuan & Guanghua Wan & Niny Khor, 2012. "The rise of middle class in rural China," China Agricultural Economic Review, Emerald Group Publishing, vol. 4(1), pages 36-51, January.
    9. Gravier-Rymaszewska, Joanna & Tyrowicz, Joanna & Kochanowicz, Jacek, 2010. "Intra-provincial inequalities and economic growth in China," Economic Systems, Elsevier, vol. 34(3), pages 237-258, September.
    10. Magalhaes, Eduardo & Diao, Xinshen, 2009. "Productivity convergence in Brazil: The case of grain production," IFPRI discussion papers 857, International Food Policy Research Institute (IFPRI).
    11. Wan, Guanghua & Zhang, Xiaobo, 2006. "Rising inequality in China," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 651-653, December.
    12. Julie A. Silva, 2013. "Rural Income Inequality in Mozambique: National Dynamics and Local Experiences?," The Review of Regional Studies, Southern Regional Science Association, vol. 43(1), pages 23-50, Summer.
    13. Maharjan, Keshav Lall & Joshi, Niraj Prakash, 2007. "A Poverty Analysis in Baitadi District, Rural Far Western Hills of Nepal: An Inequality Decomposition Analysis," MPRA Paper 35384, University Library of Munich, Germany.
    14. Giovanni Andrea Cornia and Bruno Martorano & Bruno Martorano, 2017. "The dynamics of income inequality in a dualistic economy - Malawi," UNDP Africa Policy Notes 2017-01, United Nations Development Programme, Regional Bureau for Africa.
    15. Wan, Guanghua, 2006. "Poverty Accounting by Factor Components: With an Empirical Illustration Using Chinese Data," WIDER Working Paper Series 063, World Institute for Development Economic Research (UNU-WIDER).
    16. Wan, Guanghua, 2004. "Accounting for income inequality in rural China: a regression-based approach," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 348-363, June.
    17. Iris Claus & Les Oxley & Chen Wang & Guanghua Wan & Dan Yang, 2014. "Income Inequality In The People'S Republic Of China: Trends, Determinants, And Proposed Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 686-708, September.
    18. Joshi, Niraj Prakash & Maharjan, Keshav Lall & Piya, Luni, 2010. "Poverty and Food Insecurity in Nepal A Review," MPRA Paper 35387, University Library of Munich, Germany.
    19. Schiel, Reinhard & Leibbrandt, Murray & Lam, David, 2014. "Assessing the impact of social grants on inequality: A South African case study," WIDER Working Paper Series 160, World Institute for Development Economic Research (UNU-WIDER).
    20. Joshi, Niraj Prakash & Maharjan, Keshav Lall, 2008. "A Study on Rural Poverty Using Inequality Decomposition in Western Hills of Nepal: A Case of Gulmi District," MPRA Paper 35386, University Library of Munich, Germany.
    21. Michele Giammatteo, 2007. "The bidimensional decomposition of inequality: A nested Theil approach," LIS Working papers 466, LIS Cross-National Data Center in Luxembourg.

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    Keywords

    Community/Rural/Urban Development;

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