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Chinese Poverty: Assessing the Impact of Alternative Assumptions

  • Sanjay G. Reddy

    ()

    (Dept. of Economics, Barnard College, Columbia University)

  • Camelia Minoiu

    ()

    (Dept. of Economics and Institute for Social and Economic Research and Policy, Columbia University)

This Working Paper investigates how estimates of the extent and trend of consumption poverty in China between 1990 and 2001 vary as a result of alternative plausible assumptions concerning the poverty line and estimated levels of consumption. The exercise is motivated by the existence of considerable uncertainty about the appropriate poverty lines to apply and the level and distribution of resources in China. Our methodology focuses on the following sources of variation: alternative purchasing power parity conversion factors (used to convert an international poverty line), alternative estimates of the level and distribution of private incomes, alternative estimates of the propensity to consume of lower income groups, and alternative consumer price indices. It is widely believed that substantial poverty reduction took place in China in the 1990s, and we find this conclusion to be robust to the choice of assumptions. Moreover, there is no evidence that the rate of poverty reduction declined over time. China?s record of reducing consumption poverty has been dramatic. However, estimates of the extent of Chinese poverty in any year are greatly influenced by the assumptions made. The choice among these estimates is likely to have large implications for the perceived extent and trend of world poverty.

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File URL: http://www.ipc-undp.org/pub/IPCWorkingPaper25.pdf
File Function: First version, 2006
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Paper provided by International Policy Centre for Inclusive Growth in its series Working Papers with number 25.

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Length: 35
Date of creation: Jul 2006
Date of revision:
Publication status: Published by UNDP - International Poverty Centre, July 2006, pages 1-35
Handle: RePEc:ipc:wpaper:25
Contact details of provider: Web page: http://www.ipc-undp.org
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  1. Xavier Sala-i-Martin, 2002. "The World Distribution of Income (estimated from Individual Country Distributions)," NBER Working Papers 8933, National Bureau of Economic Research, Inc.
  2. 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, 03.
  3. Sanjay G. Reddy & Camelia Minoiu, 2007. "Has World Poverty Really Fallen?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(3), pages 484-502, 09.
  4. Fang, Cheng & Zhang, Xiaobo & Fan, Shenggen, 2002. "Emergence of urban poverty and inequality in China: evidence from household survey," China Economic Review, Elsevier, vol. 13(4), pages 430-443, December.
  5. Khan, Azizur Rahman & Riskin, Carl, 2001. "Inequality and Poverty in China in the Age of Globalization," OUP Catalogue, Oxford University Press, number 9780195136494, March.
  6. Yao, Shujie, 2000. "Economic Development and Poverty Reduction in China over 20 Years of Reforms," Economic Development and Cultural Change, University of Chicago Press, vol. 48(3), pages 447-74, April.
  7. Ruoen, Ren & Chen Kai, 1995. "China's GDP in U.S. dollars based on purchasing power parity," Policy Research Working Paper Series 1415, The World Bank.
  8. Chen, Shaohua & Ravallion, Martin, 2004. "How Have the World's Poorest Fared Since the Early 1980s?," Policy Research Working Paper Series 3341, The World Bank.
  9. Jinjun Xue & Wei Zhong, 2003. "Unemployment, Poverty and Income Disparity in Urban China," Asian Economic Journal, East Asian Economic Association, vol. 17(4), pages 383-405, December.
  10. Ravallion, Martin & Shaohua Chen, 2001. "Measuring pro-poor growth," Policy Research Working Paper Series 2666, The World Bank.
  11. Datt, Gaurav, 1998. "Computational tools for poverty measurement and analysis," FCND discussion papers 50, International Food Policy Research Institute (IFPRI).
  12. Park, Albert & Wang, Sangui, 2001. "China's poverty statistics," China Economic Review, Elsevier, vol. 12(4), pages 384-398.
  13. Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and ... Convergence, Period," The Quarterly Journal of Economics, MIT Press, vol. 121(2), pages 351-397, May.
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