IDEAS home Printed from https://ideas.repec.org/a/bla/asiaps/v6y2019i2p170-185.html
   My bibliography  Save this article

Regional inequality in urban China, allowing for spatial cost of living differences: Evidence from a hedonic analysis of apartment prices

Author

Listed:
  • Chao Li
  • John Gibson
  • Geua Boe‐Gibson

Abstract

Studies of inequality in China typically ignore cost of living differences between areas. Under the Balassa–Samuelson effect, nontradeables cost more in richer areas, so nominal inequality exceeds real inequality. This especially matters in China, where spatial cost of living differences should grow with recent development of urban housing markets. We use new data on apartment prices in 104 cities in China to develop housing‐related spatial deflators. The level of spatial inequality in urban China is overstated by 27% if cost of living differences are ignored. Our hedonic analysis of 41,000 individual apartment sales shows that most price variation is between areas, rather than from features of individual apartments. The dominant trend in the reform era is for regional inequality in China to decline, contrary to the common perceptions. In nominal terms, the Theil index for interprovincial inequality in 2016 is just 46% of its 1978 level. The current results imply that the fall in inequality in real terms would be even greater.

Suggested Citation

  • Chao Li & John Gibson & Geua Boe‐Gibson, 2019. "Regional inequality in urban China, allowing for spatial cost of living differences: Evidence from a hedonic analysis of apartment prices," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 6(2), pages 170-185, May.
    • Handle: RePEc:bla:asiaps:v:6:y:2019:i:2:p:170-185
    DOI: 10.1002/app5.272
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/app5.272
    Download Restriction: no
    File URL: https://libkey.io/10.1002/app5.272?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:asiaps:v:6:y:2019:i:2:p:170-185. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=2050-2680 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.