IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i19p8261-d424751.html
   My bibliography  Save this article

Urbanization and the Urban–Rural Income Gap in China: A Continuous Wavelet Coherency Analysis

Author

Listed:
  • Yiguo Chen

    (National Academy of Economic Strategy, Chinese Academy of Social Sciences (CASS), 9F, Zhongye Dasha, No.28, Shuguangxili, Chaoyang District, Beijing 100028, China
    Research Center of Hubei Financial Development and Financial Security, No. 8 Yangqiaohu Road, Jiang-xia District, Wuhan 430205, China)

  • Peng Luo

    (School of Finance, Hubei University of Economics, No. 8 Yangqiaohu Road, Jiang-xia District, Wuhan 430205, China)

  • Tsangyao Chang

    (Department of Finance, Feng Chia University, Taichung 40724, Taiwan)

Abstract

This study applies wavelet analysis to examine the relationship between the urbanization and the urban–rural income gap in 31 provinces in China over the period 1978–2019. We find three patterns of causality between urbanization and the urban–rural income gap. Empirical results show that urbanization does Granger-cause an urban–rural income gap, the urban–rural income gap does Granger-cause urbanization, and there exists a two-way causality between the urban–rural income gap and urbanization. Furthermore, these relationships mainly exist at high frequencies (short term). The results obtained by considering the resident population are more significant than those by the registered population. These results could help local governments develop fair policies for urban and rural income distribution in the process of urbanization of different provinces, promoting the coordinated development between urban and rural areas.

Suggested Citation

  • Yiguo Chen & Peng Luo & Tsangyao Chang, 2020. "Urbanization and the Urban–Rural Income Gap in China: A Continuous Wavelet Coherency Analysis," Sustainability, MDPI, vol. 12(19), pages 1-14, October.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:19:p:8261-:d:424751
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/19/8261/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/19/8261/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Todaro, Michael P, 1969. "A Model for Labor Migration and Urban Unemployment in Less Developed Countries," American Economic Review, American Economic Association, vol. 59(1), pages 138-148, March.
    2. James E. Rauch, 1993. "Economic Development, Urban Underemployment, and Income Inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 901-918, November.
    3. Aguiar-Conraria, LuI´s & Joana Soares, Maria, 2011. "Business cycle synchronization and the Euro: A wavelet analysis," Journal of Macroeconomics, Elsevier, vol. 33(3), pages 477-489, September.
    4. Hu, Dapeng, 2002. "Trade, rural-urban migration, and regional income disparity in developing countries: a spatial general equilibrium model inspired by the case of China," Regional Science and Urban Economics, Elsevier, vol. 32(3), pages 311-338, May.
    5. Marie-Estelle Binet, 2003. "Fiscal competition between municipalities : Granger causality evidence in a dynamic panel data model," Post-Print halshs-00109401, HAL.
    6. Oates, Wallace E, 1969. "The Effects of Property Taxes and Local Public Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 77(6), pages 957-971, Nov./Dec..
    7. Guo Chen & Amy K Glasmeier & Min Zhang & Yang Shao, 2016. "Urbanization and Income Inequality in Post-Reform China: A Causal Analysis Based on Time Series Data," PLOS ONE, Public Library of Science, vol. 11(7), pages 1-16, July.
    8. Aguiar-Conraria, Luís & Azevedo, Nuno & Soares, Maria Joana, 2008. "Using wavelets to decompose the time–frequency effects of monetary policy," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(12), pages 2863-2878.
    9. Tiwari, Aviral Kumar & Mutascu, Mihai & Andries, Alin Marius, 2013. "Decomposing time-frequency relationship between producer price and consumer price indices in Romania through wavelet analysis," Economic Modelling, Elsevier, vol. 31(C), pages 151-159.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tian Zhang & Jian Peng & Xiaoshu Cao, 2023. "China’s Urban and Rural Development Significantly Affects the Pattern of Human Appropriation of Net Primary Production," Land, MDPI, vol. 12(5), pages 1-21, May.
    2. Bingyang Han & Zhili Ma & Yong Liu & Mengmeng Wang & Yingchao Lin, 2021. "Effect of Urban-Rural Income Gap on the Population Peri-Urbanization Rate in China," Land, MDPI, vol. 10(11), pages 1-22, November.
    3. Yuxin Meng & Lu Liu & Qiying Ran, 2022. "Can Urban Green Transformation Reduce the Urban–Rural Income Gap? Empirical Evidence Based on Spatial Durbin Model and Mediation Effect Model," Sustainability, MDPI, vol. 14(24), pages 1-24, December.
    4. Jianxu Liu & Xiaoqing Li & Shutong Liu & Sanzidur Rahman & Songsak Sriboonchitta, 2022. "Addressing Rural–Urban Income Gap in China through Farmers’ Education and Agricultural Productivity Growth via Mediation and Interaction Effects," Agriculture, MDPI, vol. 12(11), pages 1-23, November.
    5. Jiang, Changjun & Li, Jintao & Liu, Jilai, 2022. "Does urbanization affect the gap between urban and rural areas? Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    6. Da Fang & Yan Guo, 2021. "Induced Agricultural Production Organizations under the Transition of Rural Land Market: Evidence from China," Agriculture, MDPI, vol. 11(9), pages 1-24, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tiwari, Aviral Kumar & Oros, Cornel & Albulescu, Claudiu Tiberiu, 2014. "Revisiting the inflation–output gap relationship for France using a wavelet transform approach," Economic Modelling, Elsevier, vol. 37(C), pages 464-475.
    2. Lall, Somik V. & Selod, Harris & Shalizi, Zmarak, 2006. "Rural-urban migration in developing countries : a survey of theoretical predictions and empirical findings," Policy Research Working Paper Series 3915, The World Bank.
    3. Su-Ling TSAI & Tsangyao CHANG, 2018. "The Comovment between Money and Economic Growth in 15 Asia-Pacific Countries: Wavelet Coherency Analysis in Time-Frequency Domain," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 63-79, December.
    4. João Martins, 2022. "Bond Yields Movement Similarities and Synchronization in the G7: A Time–Frequency Analysis," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 18(2), pages 189-214, July.
    5. Lubos Hanus & Lukas Vacha, 2015. "Business cycle synchronization of the Visegrad Four and the European Union," Working Papers IES 2015/19, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2015.
    6. Monge, Manuel & Gil-Alana, Luis A. & Pérez de Gracia, Fernando, 2017. "U.S. shale oil production and WTI prices behaviour," Energy, Elsevier, vol. 141(C), pages 12-19.
    7. Shinhye Chang & Rangan Gupta & Stephen M. Miller, 2018. "Causality Between Per Capita Real GDP and Income Inequality in the U.S.: Evidence from a Wavelet Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 269-289, January.
    8. Yong Liu & Cuihong Long, 2021. "Urban and Rural Income Gap: Does Urban Spatial Form Matter in China?," SAGE Open, , vol. 11(1), pages 21582440211, March.
    9. Mutascu, Mihai & Sokic, Alexandre, 2021. "Okun's law in the US: New insights in time and frequency," The Quarterly Review of Economics and Finance, Elsevier, vol. 82(C), pages 207-222.
    10. Andrieș, Alin Marius & Căpraru, Bogdan & Ihnatov, Iulian & Tiwari, Aviral Kumar, 2017. "The relationship between exchange rates and interest rates in a small open emerging economy: The case of Romania," Economic Modelling, Elsevier, vol. 67(C), pages 261-274.
    11. Elgin, Ceyhun & Oyvat, Cem, 2013. "Lurking in the cities: Urbanization and the informal economy," Structural Change and Economic Dynamics, Elsevier, vol. 27(C), pages 36-47.
    12. Chiranjivi, GVS & Sensarma, Rudra, 2023. "The effects of economic and financial shocks on private investment: A wavelet study of return and volatility spillovers," International Review of Financial Analysis, Elsevier, vol. 90(C).
    13. Aviral K. Tiwari & Claudiu T. Albulescu & Rangan Gupta, 2016. "Time-frequency relationship between US output with commodity and asset prices," Applied Economics, Taylor & Francis Journals, vol. 48(3), pages 227-242, January.
    14. Das, Debojyoti & Bhowmik, Puja & Jana, R.K., 2018. "A multiscale analysis of stock return co-movements and spillovers: Evidence from Pacific developed markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 502(C), pages 379-393.
    15. Lin, Fu-Lai & Chen, Yu-Fen & Yang, Sheng-Yung, 2016. "Does the value of US dollar matter with the price of oil and gold? A dynamic analysis from time–frequency space," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 59-71.
    16. M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," PIDE-Working Papers 2007:16, Pakistan Institute of Development Economics.
    17. Abid, Fathi & Kaffel, Bilel, 2018. "Time–frequency wavelet analysis of the interrelationship between the global macro assets and the fear indexes," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 490(C), pages 1028-1045.
    18. Tsangyao Chang & Xiao-lin Li & Stephen M. Miller & Mehmet Balcilar & Rangan Gupta, 2013. "The Co-Movement and Causality between the U.S. Real Estate and Stock Markets in the Time and Frequency Domains," Working papers 2013-34, University of Connecticut, Department of Economics.
    19. Mensi, Walid & Rehman, Mobeen Ur & Al-Yahyaee, Khamis Hamed, 2020. "Time-frequency co-movements between oil prices and interest rates: Evidence from a wavelet-based approach," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    20. Mutascu, Mihai & Sokic, Alexandre, 2023. "Air transportation under COVID-19 pandemic restrictions: A wavelet analysis," Transport Policy, Elsevier, vol. 139(C), pages 155-181.

    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:gam:jsusta:v:12:y:2020:i:19:p:8261-:d:424751. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.