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Access to Markets and Rural Poverty: Evidence from Household Consumption in China

Author

Listed:
  • M. Shahe Emran

    (IPD and Columbia University)

  • Zhaoyang Hou

    (China Economic Research Center and Stockholm School of Economics)

Abstract

This paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural China. The econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets. We use straight-line distances to coastline and navigable river, along with the topography of the intervening counties, as sources of exogeneous variations. We also use identification through heteroskedasticity, which does not rely on standard exclusion restrictions. The results from alternative identification schemes show that better access to both domestic and international markets has positive effects on per capita consumption, the domestic market effect is significantly larger in magnitude, and there is complementarity between the access to domestic and international markets. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • M. Shahe Emran & Zhaoyang Hou, 2013. "Access to Markets and Rural Poverty: Evidence from Household Consumption in China," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 682-697, May.
  • Handle: RePEc:tpr:restat:v:95:y:2013:i:2:p:682-697
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    Keywords

    access to markets; household consumption; domestic market; international market; rural poverty; China;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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