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Household welfare impacts of China's accession to the World Trade Organization

  • Chen, Shaohua
  • Ravallion, Martin

The authors use China's national household surveys for rural and urban areas to measure and explain the welfare impacts of the changes in goods and factor prices attributed to WTO accession. Price changes are estimated separately using a general equilibrium model to capture both direct and indirecteffects of the initial tariff changes. The welfare impacts are first-order approximations based on a household model incorporating own-production activities and are calibrated to the household-level data imposing minimum aggregation. The authors find negligible impacts on inequality and poverty in the aggregate. However, diverse impacts emerge across household types and regions associated with heterogeneity in consumption behavior and income sources, with possible implications for compensatory policy responses.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3040.

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Date of creation: 31 May 2003
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Handle: RePEc:wbk:wbrwps:3040
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  1. Hongyi Li & Lyn Squire & Heng-fu Zou, 1998. "Explaining International and Intertemporal Variations in Income Inequality," CEMA Working Papers 73, China Economics and Management Academy, Central University of Finance and Economics.
  2. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 1-24.
  3. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank.
  4. 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.
  5. Branko Milanovic, 2005. "Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Surveys," World Bank Economic Review, World Bank Group, vol. 19(1), pages 21-44.
  6. Hertel, Thomas, . "Global Trade Analysis: Modeling and applications," GTAP Books 7685, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  7. Bourguignon, F. & Morrisson, C., 1989. "Income Distribution, Development and Foreign Trade: A Cross-Sectional Analysis," DELTA Working Papers 89-05, DELTA (Ecole normale supérieure).
  8. Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June.
  9. Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
  10. Ravallion, Martin, 1990. "Rural Welfare Effects of Food Price Changes under Induced Wage Responses: Theory and Evidence for Bangladesh," Oxford Economic Papers, Oxford University Press, vol. 42(3), pages 574-85, July.
  11. Jyotsna Jalan & Martin Ravallion, 1999. "China's Lagging Poor Areas," American Economic Review, American Economic Association, vol. 89(2), pages 301-305, May.
  12. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
  13. Edwards, Sebastian, 1997. "Trade Policy, Growth, and Income Distribution," American Economic Review, American Economic Association, vol. 87(2), pages 205-10, May.
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