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Chinese Poverty: Assessing the Impact of Alternative Assumptions

  • Sanjay G. Reddy

    (Department of Economics, Barnard College, Columbia University)

  • Camelia Minoiu

    (Department of Economics, Columbia University)

This paper investigates how estimates of the extent and trend of income poverty in China between 1990 and 2001 vary as a result of alternative plausible assumptions concerning key parameters that influence the poverty line and estimated consumption levels. Our methodology focuses on the following sources of variation: alternative purchasing power parity conversion factors, alternative estimates of true per capita private incomes, alternative estimates of the share of income assumed to be consumed by the lower income groups, and alternative consumer price indices. We find that regardless of the assumptions we make within a reasonable range, a remarkable reduction in consumption poverty occurred in China during the 1990s. However, estimates of the extent of Chinese poverty in any year are greatly influenced by the assumptions made. China’s record of reducing aggregate deprivations is encouraging, but must be interpreted with care, especially in view of some recent evidence concerning possible increases in consumption poverty (especially in urban areas) and worsening nutrition.

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File URL: http://128.118.178.162/eps/mic/papers/0509/0509002.pdf
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Paper provided by EconWPA in its series Microeconomics with number 0509002.

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Length: 29 pages
Date of creation: 07 Sep 2005
Date of revision:
Handle: RePEc:wpa:wuwpmi:0509002
Note: Type of Document - pdf; pages: 29
Contact details of provider: Web page: http://128.118.178.162

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  1. 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.
  2. 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.
  3. Xavier Sala-i-Martin, 2002. "The world distribution of income (estimated from individual country distributions)," Discussion Papers 0102-58, Columbia University, Department of Economics.
  4. 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.
  5. 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.
  6. Gibson, John & Huang, Jikun & Rozelle, Scott, 2001. "Improving Estimates Of Inequality And Poverty From Urban China'S Household Income And Expenditure Survey," Working Papers 11989, University of California, Davis, Department of Agricultural and Resource Economics.
  7. 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.
  8. Khan, Azizur Rahman & Riskin, Carl, 2001. "Inequality and Poverty in China in the Age of Globalization," OUP Catalogue, Oxford University Press, number 9780195136494, March.
  9. Ravallion, Martin & Shaohua Chen, 2001. "Measuring pro-poor growth," Policy Research Working Paper Series 2666, The World Bank.
  10. Datt, Gaurav, 1998. "Computational tools for poverty measurement and analysis," FCND discussion papers 50, International Food Policy Research Institute (IFPRI).
  11. Park, Albert & Wang, Sangui, 2001. "China's poverty statistics," China Economic Review, Elsevier, vol. 12(4), pages 384-398.
  12. 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.
  13. 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.
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