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When economic reform is faster than statistical reform - measuring and explaining inequality in rural China

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  • Ravallion, Martin
  • Shaohua Chen

Abstract

Official tabulations from household survey data suggest rising income inequality in post-reform rural China, a trend of public concern. But the structural changes in China's rural economy have not been properly reflected in the methods used to process raw survey data. Using micro data from four provinces, the authors find that two-thirds of the conventionally measured increase in inequality in 1985-90 vanishes when market-based valuation methods are used and allowances are made for regional cost-of-living differences. The data revisions also suggest somewhat different explanations for rising inequality. Nonfarm income was secondary to grain production. While access to farm land was relatively equal, higher returns to land over time were inequality-increasing. But holding other factors constant, lower returns to physical capital reduced inequality over time, as did private transfers.

Suggested Citation

  • Ravallion, Martin & Shaohua Chen, 1998. "When economic reform is faster than statistical reform - measuring and explaining inequality in rural China," Policy Research Working Paper Series 1902, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1902
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Guang, Y., 1999. "Facing unemployment : urban layoffs and the way out in post-reform China (1993-1999) : an empirical and theoretical analysis," ISS Working Papers - General Series 19053, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    3. Partha Gangopadhyay & Mustafa A. Rahman & Biswa Nath Bhattacharya, 2014. "Are there any roles for social conformity and deviance in poverty? Insights from a field study on working poverty and educational investment in Bangladesh," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 19(4), pages 539-557, October.
    4. Fan, Shenggen & Chan-Kang, Connie, 2004. "Road development, economic growth, and poverty reduction in China," DSGD discussion papers 12, International Food Policy Research Institute (IFPRI).
    5. Benjamin, Dwayne & Brandt, Loren & Giles, John, 2005. "The Evolution of Income Inequality in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 769-824, July.
    6. Heshmati, Almas, 2004. "Regional Income Inequality in Selected Large Countries," IZA Discussion Papers 1307, Institute of Labor Economics (IZA).
    7. Jalan, Jyotsna & Ravallion, Martin, 1999. "Are the poor less well insured? Evidence on vulnerability to income risk in rural China," Journal of Development Economics, Elsevier, vol. 58(1), pages 61-81, February.
    8. Zhu, Nong & Luo, Xubei, 2008. "The impact of remittances on rural poverty and inequality in China," Policy Research Working Paper Series 4637, The World Bank.
    9. Chaudhuri, Shubham & Ravallion, Martin, 2006. "Partially awakened giants : uneven growth in China and India," Policy Research Working Paper Series 4069, The World Bank.
    10. Zhu, Nong & Luo, Xubei, 2006. "Nonfarm activity and rural income inequality : a case study of two provinces in China," Policy Research Working Paper Series 3811, The World Bank.

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