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When economic reform is faster than statistical reform - measuring and explaining inequality in rural China, Volume 1
Author:Ravallion, Martin; Shaohua Chen; Country:China;
Date Stored:2001/05/14Document Date:1998/03/31
Document Type:Policy Research Working PaperSubTopics:Environmental Economics & Policies; Economic Theory & Research; Rural Poverty Reduction; Inequality; Services & Transfers to Poor; Labor Policies; Poverty Impact Evaluation; Safety Nets and Transfers
Language:EnglishMajor Sector:(Historic)Economic Policy
Region:East Asia and PacificReport Number:WPS1902
Sub Sectors:Macro/Non-TradeCollection Title:Policy Research working paper ; no. WPS 1902
Volume No:1  

Summary: 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.

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