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Pro-poor consumption effects of trade liberalization: Evidence from China

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  • Wang, Bei
  • Qian, Xuefeng
  • Li, Ying
  • Cao, Jia

Abstract

This study examines the impact of trade liberalization on the consumption welfare of urban households in China. The results indicate that trade liberalization in consumer goods has improved the consumption welfare of Chinese urban households with a “pro-poor” distribution across regions and households in a region, suggesting that the consumption effects are more pronounced for less developed regions and low-income households in a region. Within a city, differences in the consumption effects arise from variations in household consumption structures and the tariff-price pass-through among different types of products. Across cities, differences in the consumption effects stem from the dual heterogeneity in industrial structure and consumer demand. The variety effect resulting from changes in the types of imported consumer goods also enhances the consumption effects of trade liberalization.

Suggested Citation

  • Wang, Bei & Qian, Xuefeng & Li, Ying & Cao, Jia, 2024. "Pro-poor consumption effects of trade liberalization: Evidence from China," China Economic Review, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:chieco:v:86:y:2024:i:c:s1043951x24000786
    DOI: 10.1016/j.chieco.2024.102189
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    More about this item

    Keywords

    Trade liberalization; Consumption effects; Pro-poor distribution; Variety effect;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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