The Cost of Living in China: Implications for Inequality and Poverty
China’s economic development in recent decades has been tremendous, but subject to debate. This paper calculates regional prices that make incomes comparable across both time and space using the Engel-curve approach. Incomes are adjusted using these price indices, providing new estimates of inequality and poverty development. Our findings contrast with measures based on the official consumer price indices (CPIs) – in a time characterized by high economic growth, we find a larger increase in inequality and a more moderate poverty reduction than what is indicated by the CPI-adjusted measures.
|Date of creation:||07 Feb 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway|
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- Terry Sicular & Yue Ximing & Björn Gustafsson & Li Shi, 2007.
"The Urban-Rural Income Gap And Inequality In China,"
Review of Income and Wealth,
International Association for Research in Income and Wealth, vol. 53(1), pages 93-126, 03.
- Sicular, Terry & Yue, Ximing & Gustafsson, Bjorn & Li, Shi, 2006. "The Urban-Rural Income Gap and Inequality in China," Working Paper Series RP2006/135, World Institute for Development Economic Research (UNU-WIDER).
- Robert J. Hill & Iqbal Syed, 2010. "Improving International Comparisons of Real Output: The ICP 2005 Benchmark and its Implications for China," Discussion Papers 2010-25, School of Economics, The University of New South Wales.
- Ravallion, Martin & Chen, Shaohua, 2007.
"China's (uneven) progress against poverty,"
Journal of Development Economics,
Elsevier, vol. 82(1), pages 1-42, January.
- Angus Deaton & Salman Zaidi, 1999.
"Guidelines for Constructing Consumption Aggregates For Welfare Analysis,"
217, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
- Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101.
- Deaton, A. & Zaidi, S., 1999. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," Papers 192, Princeton, Woodrow Wilson School - Development Studies.
- John Gibson & Grant Scobie, 2010. "Using Engel curves to estimate CPI bias in a small, open, inflation-targeting economy," Applied Financial Economics, Taylor & Francis Journals, vol. 20(17), pages 1327-1335.
- Sangui Wang & Dwayne Benjamin & Loren Brandt & John Giles & Yingxing Li & Yun Li, 2007. "Inequality and Poverty in China during Reform," Working Papers PMMA 2007-07, PEP-PMMA.
- Loren Brandt & Carsten A. Holz, 2006.
"Spatial Price Differences in China: Estimates and Implications,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 55, pages 43-86.
- Brandt, Loren & Holz, Carsten A, 2006. "Spatial Price Differences in China: Estimates and Implications," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 43-86, October.
- Loren BRANDT & Carsten A HOLZ, 2005. "Spatial Price Differences in China: Estimates and Implications," Development and Comp Systems 0504010, EconWPA.
- Loren Brandt & Carsten Holz, 2005. "Spatial Price Differences in China: Estimates and Implications," Microeconomics 0512001, EconWPA.
- Yaohui Zhao, 1999. "Leaving the Countryside: Rural-to-Urban Migration Decisions in China," American Economic Review, American Economic Association, vol. 89(2), pages 281-286, May.
- James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
- John A. Bishop & Feijun Luo & Xi Pan, 2006. "Economic Transition And Subjective Poverty In Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(4), pages 625-641, December.
- Irineu E. de Carvalho Filho & Marcos Chamon, 2008.
"The Myth of Post-Reform Income Stagnation; Evidence from Brazil and Mexico,"
IMF Working Papers
08/197, International Monetary Fund.
- Filho, Irineu de Carvalho & Chamon, Marcos, 2012. "The myth of post-reform income stagnation: Evidence from Brazil and Mexico," Journal of Development Economics, Elsevier, vol. 97(2), pages 368-386.
- de Carvalho Filho, Irineu & Chamon, Marcos, 2011. "The myth of post-reform income stagnation: Evidence from Brazil and Mexico," MPRA Paper 28532, University Library of Munich, Germany.
- Eswar Prasad, 2004. "China's Growth and Integration into the World Economy; Prospects and Challenges," IMF Occasional Papers 232, International Monetary Fund.
- John Gibson & Steven Stillman, 2004.
"CPI Bias and Real Living Standards in Russia During The Transition,"
Econometric Society 2004 North American Summer Meetings
504, Econometric Society.
- Gibson, John & Stillman, Steven & Le, Trinh, 2008. "CPI bias and real living standards in Russia during the transition," Journal of Development Economics, Elsevier, vol. 87(1), pages 140-160, August.
- John Gibson & Steven Stillman & Trinh Le, 2004. "CPI Bias and Real Living Standards in Russia During the Transition," Working Papers in Economics 04/02, University of Waikato, Department of Economics.
- Dollar, David & Kraay, Aart, 2001.
"Growth is good for the poor,"
Policy Research Working Paper Series
2587, The World Bank.
- Gluschenko, Konstantin, 2006. "Biases in cross-space comparisons through cross-time price indexes: The case of Russia," BOFIT Discussion Papers 9/2006, Bank of Finland, Institute for Economies in Transition.
- Beatty, Timothy K.M. & Larsen, Erling Roed, 2004.
"Using Engel Curves To Estimate Bias In The Canadian Cpi As A Cost Of Living Index,"
15836, University of British Columbia, Food and Resource Economics.
- Timothy Beatty & Erling Røed Larsen, 2005. "Using Engel curves to estimate bias in the Canadian CPI as a cost of living index," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 482-499, May.
- Chen, Shaohua & Ravallion, Martin, 2008. "China is poorer than we thought, but no less successful in the fight against poverty," Policy Research Working Paper Series 4621, The World Bank.
- Bruce W. Hamilton, 2001. "Using Engel's Law to Estimate CPI Bias," American Economic Review, American Economic Association, vol. 91(3), pages 619-630, June.
- Shi Li & Chuliang Luo & Terry Sicular, 2011. "Overview: Income Inequality and Poverty in China, 2002-2007," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 201110, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
- J. Peter Neary, 2004.
"Rationalising the Penn World Table: True Multilateral Indices for International Comparisons of Real Income,"
199622, School of Economics, University College Dublin.
- J. Peter Neary, 2004. "Rationalizing the Penn World Table: True Multilateral Indices for International Comparisons of Real Income," American Economic Review, American Economic Association, vol. 94(5), pages 1411-1428, December.
- Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
- Gale, H. Frederick, Jr. & Huang, Kuo S., 2007. "Demand For Food Quantity And Quality In China," Economic Research Report 7252, United States Department of Agriculture, Economic Research Service.
- Garry F. Barrett & Matthew Brzozowski, 2010. "Using Engel Curves to Estimate the Bias in the Australian CPI," The Economic Record, The Economic Society of Australia, vol. 86(272), pages 1-14, 03.
- Khan, Azizur Rahman & Griffin, Keith & Riskin, Carl & Renwei, Zhao, 1993. "Sources of income inequality in post-reform China," China Economic Review, Elsevier, vol. 4(1), pages 19-35.
- Malte Lübker & Graham Smith & John Weeks, 2002. "Growth and the poor: a comment on Dollar and Kraay," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(5), pages 555-571.
- Chul Chung & John Gibson & Bonggeun Kim, 2010. "CPI Mismeasurements and Their Impacts on Economic Management in Korea," Asian Economic Papers, MIT Press, vol. 9(1), pages 1-15, January.
- Keith Griffin & Azizur Rahman Khan & Carl Riskin, 1999. "Income Distribution in Urban China during the Period of Economic Reform and Globalization," American Economic Review, American Economic Association, vol. 89(2), pages 296-300, May.
When requesting a correction, please mention this item's handle: RePEc:hhs:osloec:2013_006. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Magnus Gabriel Aase)The email address of this maintainer does not seem to be valid anymore. Please ask Magnus Gabriel Aase to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.