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Consumption Based Estimates of Urban Chinese Growth

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  • Mr. Marcos d Chamon
  • Mr. Irineu E de Carvalho Filho

Abstract

This paper estimates the household income growth rates implied by food demand in a sample of urban Chinese households in 1993–2005. Our estimates, based on Engel curves for food consumption, indicate an average per capita income growth of 6.8 percent per year in 1993–2005. This figure is slightly larger than the 5.9 percent per year obtained by deflating nominal incomes by the CPI. We attribute this discrepancy to a small bias in the CPI, which is of a similar magnitude to the one often associated with the CPI in the United States. Our estimates indicate stronger gains among poorer households, suggesting that urban inflation up to 2005 in China was “pro-poor,” in the sense that the increase in the cost of living for poorer households was smaller than for the average one.

Suggested Citation

  • Mr. Marcos d Chamon & Mr. Irineu E de Carvalho Filho, 2013. "Consumption Based Estimates of Urban Chinese Growth," IMF Working Papers 2013/265, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2013/265
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    Cited by:

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    2. Chunyun Wang & Xiaoxi Yu & Jiang Zhao, 2022. "Identifying the Real Income Disparity in Prefecture-Level Cities in China: Measurement of Subnational Purchasing Power Parity Based on the Stochastic Approach," Sustainability, MDPI, vol. 14(16), pages 1-24, August.
    3. Zhang, Xiaoheng & Yu, Xiaohua & You, Liangzhi, 2020. "Does the Granary County Subsidy Program Lead to manipulation of grain production data in China?," China Economic Review, Elsevier, vol. 62(C).

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    More about this item

    Keywords

    WP; cost of living; Household consumption; Income growth; CPI Bias; price deflator; bias estimate; consumption expenditure; measurement error; survey cross-sections; income variable; Income; Consumption; Consumer price indexes; Public expenditure review;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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