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Improving Estimates of Inequality and Poverty from Urban China's Household Income and Expenditure Survey

Author

Listed:
  • John Gibson
  • Jikun Huang
  • Scott Rozelle

Abstract

In urban China the Household Income and Expenditure Survey requires respondents to keep a daily expenditure diary for a full 12‐month period. This onerous reporting task makes it difficult to recruit respondents, compromising the sample. This article uses monthly expenditure data from two urban areas of China to see if data collection short‐cuts, such as extrapolating to annual totals from expenditure reports in only some months of the year, would harm the accuracy of annual expenditure, inequality and poverty estimates. Replacing 12‐month diaries with simple extrapolations from either one, two, four or six months would cause a sharp increase in estimates of annual inequality and poverty. This undermines international comparisons of inequality statistics because no country other than China uses such comprehensive 12‐month expenditure records. But a corrected form of extrapolation, based on correlations between the same household's expenditures in different months of the year, gives much smaller errors in estimates of inequality and poverty.

Suggested Citation

  • John Gibson & Jikun Huang & Scott Rozelle, 2003. "Improving Estimates of Inequality and Poverty from Urban China's Household Income and Expenditure Survey," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(1), pages 53-68, March.
    • Handle: RePEc:bla:revinw:v:49:y:2003:i:1:p:53-68
    DOI: 10.1111/1475-4991.00074
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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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