Access to Markets and Rural Poverty: Evidence from Household Consumption in China

Posted: 14 Feb 2011 Last revised: 30 Apr 2014

See all articles by M. Shahe Emran

M. Shahe Emran

George Washington University - Department of Economics

Zhaoyang Hou

China Economic Research Center, Stockholm School of Economics

Date Written: February 10, 2011

Abstract

This paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural China. The econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets. We use straight line distances to coastline and navigable river along with topography of the intervening counties as sources of exogeneous variations. We also use identification through heteroskedasticity which does not rely on standard exclusion restrictions. The results from alternative identification schemes show that (i) better access to both domestic and international markets has positive effects on per capita consumption, (ii) the domestic market effect is significantly larger in magnitude and (iii) there is complementarity between the access to domestic and international markets.

Keywords: Access to Markets, Household Consumption, Domestic Market, International Market, Rural Poverty, China

JEL Classification: O12, O16

Suggested Citation

Emran, M. Shahe and Hou, Zhaoyang, Access to Markets and Rural Poverty: Evidence from Household Consumption in China (February 10, 2011). Review of Economics and Statistics, Vol. 95, No. 2, May 2013. Available at SSRN: https://ssrn.com/abstract=1759731

M. Shahe Emran (Contact Author)

George Washington University - Department of Economics ( email )

2115 G Street NW
302 Monroe Hall
Washington, DC 20052
United States

Zhaoyang Hou

China Economic Research Center, Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

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