Estimating Income Inequality in China Using Grouped Data and the Generalized Beta Distribution
There are two main types of data sources of income distributions in China: household survey data and grouped data. Household survey data are typically available for isolated years and individual provinces. In comparison, aggregate or grouped data are typically available more frequently and usually have national coverage. In principle, grouped data allow investigation of the change of inequality over longer, continuous periods of time, and the identification of patterns of inequality across broader regions. Nevertheless, a major limitation of grouped data is that only mean (average) income and income shares of quintile or decile groups of the population are reported. Directly using grouped data reported in this format is equivalent to assuming that all individuals in a quintile or decile group have the same income. This potentially distorts the estimate of inequality within each region. The aim of this paper is to apply an improved econometric method designed to use grouped data to study income inequality in China. A generalized beta distribution is employed to model income inequality in China at various levels and periods of time. The generalized beta distribution is more general and flexible than the lognormal distribution that has been used in past research, and also relaxes the assumption of a uniform distribution of income within quintile and decile groups of populations. The paper studies the nature and extent of inequality in rural and urban China over the period 1978 to 2002. Income inequality in the whole of China is then modeled using a mixture of province-specific distributions. The estimated results are used to study the trends in national inequality, and to discuss the empirical findings in the light of economic reforms, regional policies, and globalization of the Chinese economy. Copyright � 2007 The Authors; Journal compilation � International Association for Research in Income and Wealth 2007.
(This abstract was borrowed from another version of this item.)
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.wider.unu.edu/
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.:
- Kanbur, Ravi & Zhang, Xiaobo, 2001.
"Fifty Years Of Regional Inequality In China: A Journey Through Revolution, Reform And Openness,"
7236, Cornell University, Department of Applied Economics and Management.
- Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers.
- Kakwani, N C & Podder, N, 1973. "On the Estimation of Lorenz Curves from Grouped Observations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 278-92, June.
- Kai-yuen, Tsui, 1998. "Factor Decomposition of Chinese Rural Income Inequality: New Methodology, Empirical Findings, and Policy Implications," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 502-528, September.
- 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 Holz, 2005. "Spatial Price Differences in China: Estimates and Implications," Microeconomics 0512001, EconWPA.
- Loren BRANDT & Carsten A HOLZ, 2005. "Spatial Price Differences in China: Estimates and Implications," Development and Comp Systems 0504010, EconWPA.
- Chotikapanich, Duangkamon & Griffiths, William E. & Rao, D. S. Prasada, 2007.
"Estimating and Combining National Income Distributions Using Limited Data,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 25, pages 97-109, January.
- Duangkamon Chotikapanich & William E. Griffiths & D.S. Prasada Rao, 2005. "Estimating and Combining National Income Distributions using Limited Data," Department of Economics - Working Papers Series 926, The University of Melbourne.
- D.S. Prasada Rao & Duangkamon Chotikapanich & William E. Griffiths, 2004. "Estimating and Combining National Income Distributions using Limited Data," Econometric Society 2004 Australasian Meetings 213, Econometric Society.
- Yang, Xiaokai & Wang, Jiangou & Wills, Ian, 1992. "Economic growth, commercialization, and institutional changes in rural China, 1979-1987," China Economic Review, Elsevier, vol. 3(1), pages 1-37.
- John Knight & Lina Song, 2003. "Increasing urban wage inequality in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 597-619, December.
- Xin Meng, 2004. "Economic Restructuring and Income Inequality in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 357-379, 09.
- Branko milanovic, 2003.
"True world income distribution, 1988 and 1993: First calculation based on household surveys alo,"
- Branko Milanovic, 2002. "True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone," Economic Journal, Royal Economic Society, vol. 112(476), pages 51-92, January.
- Gustafsson, Bjorn & Shi, Li, 2002. "Income inequality within and across counties in rural China 1988 and 1995," Journal of Development Economics, Elsevier, vol. 69(1), pages 179-204, October.
- McDonald, James B, 1984. "Some Generalized Functions for the Size Distribution of Income," Econometrica, Econometric Society, vol. 52(3), pages 647-63, May.
- McDonald, James B & Ransom, Michael R, 1979. "Functional Forms, Estimation Techniques and the Distribution of Income," Econometrica, Econometric Society, vol. 47(6), pages 1513-25, November.
- Chen, Shaohua & Ravallion, Martin, 1996. "Data in transition: Assessing rural living standards in Southern China," China Economic Review, Elsevier, vol. 7(1), pages 23-56.
When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:rp2006-134. 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: (Bruck Tadesse)
If references are entirely missing, you can add them using this form.