Chinese Poverty: Assessing the Impact of Alternative Assumptions

25 Pages Posted: 12 Nov 2008

See all articles by Camelia Minoiu

Camelia Minoiu

Federal Reserve Board

Sanjay G. Reddy

The New School - Department of Economics

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Abstract

This paper investigates how estimates of the extent and trend of consumption poverty in China between 1990 and 2004 vary as a result of alternative plausible assumptions concerning the poverty line and estimated levels of consumption. Our methodology focuses on the following sources of variation: purchasing power exchange rates (used to convert an international poverty line), alternative levels and distributions of private incomes, alternative estimates of the propensity to consume of different income groups, and alternative spatial and temporal price indices. We report national, urban and rural poverty estimates corresponding to distinct assumptions. It is widely believed that substantial poverty reduction took place in China in the 1990s, and we find this conclusion to be largely robust to the choice of assumptions, although estimates of the extent of Chinese poverty, and therefore of world poverty, in any year are greatly influenced by this choice.

Suggested Citation

Minoiu, Camelia and Reddy, Sanjay G., Chinese Poverty: Assessing the Impact of Alternative Assumptions. Review of Income and Wealth, Vol. 54, Issue 4, pp. 572-596, December 2008. Available at SSRN: https://ssrn.com/abstract=1299949 or http://dx.doi.org/10.1111/j.1475-4991.2008.00288.x

Camelia Minoiu (Contact Author)

Federal Reserve Board ( email )

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Washington, DC 20551
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Sanjay G. Reddy

The New School - Department of Economics ( email )

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6 East 16th Street
New York, NY 10003
United States

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