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Consumption Based Estimates of Urban Chinese Growth

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  • Marcos Chamon
  • Irineu E de Carvalho Filho

Abstract

This paper estimates the household income growth rates implied by food demand in a sample of urban Chinese households in 1993–2005. Our estimates, based on Engel curves for food consumption, indicate an average per capita income growth of 6.8 percent per year in 1993–2005. This figure is slightly larger than the 5.9 percent per year obtained by deflating nominal incomes by the CPI. We attribute this discrepancy to a small bias in the CPI, which is of a similar magnitude to the one often associated with the CPI in the United States. Our estimates indicate stronger gains among poorer households, suggesting that urban inflation up to 2005 in China was “pro-poor,” in the sense that the increase in the cost of living for poorer households was smaller than for the average one.

Suggested Citation

  • Marcos Chamon & Irineu E de Carvalho Filho, 2013. "Consumption Based Estimates of Urban Chinese Growth," IMF Working Papers 13/265, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:13/265
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    References listed on IDEAS

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    More about this item

    Keywords

    Household consumption; Income growth; CPI Bias; consumption expenditures; labor income; household expenditure; household characteristics; Consumer Economics: Empirical Analysis; General; Measurement and Analysis of Poverty;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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