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The (Declining) Role of Households in Sustaining China's Economy: Structural Path Analysis for 1997-2007

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  • Ling Yang
  • James Thurlow
  • Michael L. Lahr

Abstract

Current explanations for private consumption's diminished role in China focus on the expansion of exports and investments. Using structural path analysis, we find additional contributing factors. First, growth patterns during 1997-2007 favoured sectors with low production multipliers. Secondly, income multipliers fell in most sectors, especially in fast growing sectors and partly due to urbanization. This means less trickledown from growth to household incomes. Thirdly, households became less important in sustaining domestic production processes.

Suggested Citation

  • Ling Yang & James Thurlow & Michael L. Lahr, 2012. "The (Declining) Role of Households in Sustaining China's Economy: Structural Path Analysis for 1997-2007," WIDER Working Paper Series wp-2012-083, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2012-083
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2012-083.pdf
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    Cited by:

    1. Mohammed Rachid Doukkali & Caroline Lejars, 2015. "Energy cost of irrigation policy in Morocco: a social accounting matrix assessment," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 31(3), pages 422-435, September.

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    Keywords

    Consumption; Households; Regional economics;
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