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Explaining the Poverty Difference between Inland and Coastal China: A Regression-based Decomposition Approach


  • Guanghua Wan
  • Yin Zhang


This study proposes a decomposition framework for quantifying contributions of the determinants of poverty to spatial differences or temporal changes in poverty. This framework is then applied to address the issue why poverty incidence is higher in inland than in coastal China. The empirical application requires household or individual income observations which, generally speaking, are not available. Thus, a data-generation method developed by Shorrocks and Wan is introduced to construct such observations from grouped income data. It is found that inland China is poorer than coastal China, mainly due to lower efficiency in resource utilization rather than less endowment of resources. Also, trade became poverty-reducing in coastal China in the late 1990s but remained poverty-inducing in inland China. Policy implications are briefly discussed. Copyright © 2008 The Authors.

Suggested Citation

  • Guanghua Wan & Yin Zhang, 2008. "Explaining the Poverty Difference between Inland and Coastal China: A Regression-based Decomposition Approach," Review of Development Economics, Wiley Blackwell, vol. 12(2), pages 455-467, May.
  • Handle: RePEc:bla:rdevec:v:12:y:2008:i:2:p:455-467

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    References listed on IDEAS

    1. Schady, Norbert R, 2002. "Picking the Poor: Indicators for Geographic Targeting in Peru," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 417-433, September.
    2. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657 Elsevier.
    3. Kuan Xu, 1999. "Statistical Inference for the Sen-Shorrocks-Thon Index of Poverty Intensity," Journal of Income Distribution, Journal of Income Distribution, vol. 8(1), pages 8-8, June.
    4. Michael F. Förster & Marco Mira d'Ercole, 2005. "Income Distribution and Poverty in OECD Countries in the Second Half of the 1990s," OECD Social, Employment and Migration Working Papers 22, OECD Publishing.
    5. John L. Rodgers & Joan R. Rodgers, 1991. "Measuring the Intensity of Poverty among Subpopulations: Applications to the United States," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 338-361.
    6. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    7. Myles, John & Picot, Garnett, 2000. "Poverty Indices and Policy Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 161-179, June.
    8. Lars Osberg & Kuan Xu, 1999. "Poverty Intensity: How Well Do Canadian Provinces Compare?," Canadian Public Policy, University of Toronto Press, vol. 25(2), pages 179-195, June.
    9. François Bourguignon & Satya Chakravarty, 2003. "The Measurement of Multidimensional Poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(1), pages 25-49, April.
    10. Subramanian, S., 2005. "Poverty Measurement and Theories of Beneficence," WIDER Working Paper Series 062, World Institute for Development Economic Research (UNU-WIDER).
    11. Thon, Dominique, 1979. "On Measuring Poverty," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(4), pages 429-439, December.
    12. Kuan Xu & Lars Osberg, 2002. "On Sen's Approach to Poverty Measures and Recent Developments," Department of Economics at Dalhousie University working papers archive sensw, Dalhousie, Department of Economics.
    13. Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-327, July.
    14. Shorrocks, Anthony F, 1995. "Revisiting the Sen Poverty Index," Econometrica, Econometric Society, vol. 63(5), pages 1225-1230, September.
    15. Lars Osberg, 2000. "Poverty in Canada and the United States: measurement, trends, and implications," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 847-877, November.
    16. Hill, Robert J, 2000. " Constructing Bounds on Per Capita Income Differentials across Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(2), pages 285-302, June.
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    Cited by:

    1. Somnath Chattopadhyay & Amita Majumder & Hasanur Jaman, 2014. "Decomposition of inter-regional poverty gap in India: a spatial approach," Empirical Economics, Springer, vol. 46(1), pages 65-99, February.
    2. Peng Bin, 2016. "Dynamic Development of Regional Disparity in Mainland China: An Experimental Study Based on a Multidimensional Index," Sustainability, MDPI, Open Access Journal, vol. 8(12), pages 1-28, December.
    3. repec:bla:growch:v:48:y:2017:i:3:p:459-486 is not listed on IDEAS
    4. Muqun Li & Ian Coxhead, 2011. "Trade and Inequality with Limited Labor Mobility: Theory and Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 15(1), pages 48-65, February.
    5. repec:gam:jsusta:v:9:y:2017:i:6:p:1046-:d:101639 is not listed on IDEAS

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