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Consumption Based Estimates of Urban Chinese Growth

25 Pages Posted: 20 Jan 2014  

Marcos Chamon

International Monetary Fund (IMF) - Research Department

Irineu de Carvalho Filho

International Monetary Fund (IMF)

Date Written: December 2013

Abstract

This paper estimates the household income growth rates implied by food demand in a sample of urban Chinese households in 1993–2005. Our estimates, based on Engel curves for food consumption, indicate an average per capita income growth of 6.8 percent per year in 1993–2005. This figure is slightly larger than the 5.9 percent per year obtained by deflating nominal incomes by the CPI. We attribute this discrepancy to a small bias in the CPI, which is of a similar magnitude to the one often associated with the CPI in the United States. Our estimates indicate stronger gains among poorer households, suggesting that urban inflation up to 2005 in China was “pro-poor,” in the sense that the increase in the cost of living for poorer households was smaller than for the average one.

Keywords: Economic growth, China, Income distribution, Private sector, Economic models, Household consumption, Income growth, CPI Bias, consumption expenditures, labor income, household expenditure, household characteristics, household income, consumer price index, consumption based estimates, household expenditures, aggregate consumption, consumption patterns, consumption growth, consumption measures, consumption data, household consumption expenditures, relative price changes, price deflator, expenditure inequality, real per capita consumption, total consumption, expenditure distribution, household expenditure survey, income inequality, consumption inequality

JEL Classification: D12, E20, I32, O10

Suggested Citation

Chamon, Marcos and de Carvalho Filho, Irineu, Consumption Based Estimates of Urban Chinese Growth (December 2013). IMF Working Paper No. 13/265. Available at SSRN: https://ssrn.com/abstract=2381858

Marcos Chamon (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-5867 (Phone)

Irineu De Carvalho Filho

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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