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Income distribution in urban China: An overlooked data inconsistency issue

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  • Jin, Hailong
  • Qian, Hang
  • Wang, Tong
  • Choi, E. Kwan

Abstract

The Urban Household Income and Expenditure Surveys, conducted by the National Bureau of Statistics, are extensively explored in income distribution studies. However, we find that a survey coverage expansion that includes migrant residents in the urban sample may induce serious data inconsistency before and after the year 2002. To further unveil the inconsistency, we construct a random walk hierarchical beta-2 distribution model, estimated by the unscented Kalman filter, to investigate the magnitude of the structural break. Results show that the gaps of Gini coefficients and the shape of the distribution can be bridged by a counterfactual time series that coherently measures the urban China income distribution.

Suggested Citation

  • Jin, Hailong & Qian, Hang & Wang, Tong & Choi, E. Kwan, 2014. "Income distribution in urban China: An overlooked data inconsistency issue," China Economic Review, Elsevier, vol. 30(C), pages 383-396.
    • Handle: RePEc:eee:chieco:v:30:y:2014:i:c:p:383-396
    DOI: 10.1016/j.chieco.2014.02.004
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    Cited by:

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    2. Jeffrey Zax, 2016. "Provincial valuations of human capital in urban China, inter-regional inequality and the implicit value of a Guangdong hukou," ERSA conference papers ersa16p693, European Regional Science Association.

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    More about this item

    Keywords

    Income distribution; Sampling inconsistency; Unscented Kalman filter; China;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions

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