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A new ordered family of Lorenz curves with an application to measuring income inequality and poverty in rural China

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  • WANG, Zuxiang
  • SMYTH, Russell
  • NG, Yew-Kwang

Abstract

The most common data source on income distribution in China is grouped data. When income data is in grouped form, some acceptable Lorenz model is needed to approximate the underlying Lorenz curve. This paper presents a new family of Lorenz curves and applies the main model in our proposed family of Lorenz curves to income data for rural China over the period 1980 to 2006. We find that the income share of the rural population at the low end of the income scale has been shrinking, income inequality in rural China has increased over time and that income inequality has impeded attempts to reduce poverty. However, the welfare of the rural population is still improving in terms of the generalized Lorenz dominance criterion.

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  • WANG, Zuxiang & SMYTH, Russell & NG, Yew-Kwang, 2009. "A new ordered family of Lorenz curves with an application to measuring income inequality and poverty in rural China," China Economic Review, Elsevier, vol. 20(2), pages 218-235, June.
    • Handle: RePEc:eee:chieco:v:20:y:2009:i:2:p:218-235
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    2. Kanbur, Ravi & Wang, Yue & Zhang, Xiaobo, 2021. "The great Chinese inequality turnaround," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 467-482.
    3. Liu, Ying & Huang, Jikun & Zikhali, Precious, 2016. "The bittersweet fruits of industrialization in rural China: The cost of environment and the benefit from off-farm employment," China Economic Review, Elsevier, vol. 38(C), pages 1-10.
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    5. Miguel Sordo & Jorge Navarro & José Sarabia, 2014. "Distorted Lorenz curves: models and comparisons," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(4), pages 761-780, April.
    6. Kanbur, Ravi & Wang, Yue & Zhang, Xiaobo, 2021. "The great Chinese inequality turnaround," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 467-482.
    7. Cheong, Tsun Se & Wu, Yanrui, 2013. "Regional disparity, transitional dynamics and convergence in China," Journal of Asian Economics, Elsevier, vol. 29(C), pages 1-14.

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