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Department of Economics, Norwegian School of Economics (NHH) Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)

No 21/2012:
The cost of living in China: Implications for inequality and poverty.

Ingvild Almås () and Åshild Auglænd Johnsen ()

Abstract: China’s economic development in recent decades has been tremendous, but subject to debate. This paper calculates regional prices that make incomes comparable across both time and space using the Engel-curve approach. Incomes are adjusted using these price indices, providing new estimates of inequality and poverty development. Our findings contrast with measures based on the official consumer price indices (CPIs) – in a time characterized by high economic growth,we find a larger increase in inequality and a more moderate poverty reduction than what is indicated by the CPI-adjusted measures.

Keywords: Inequality; poverty; China.; (follow links to similar papers)

JEL-Codes: D01; E31; (follow links to similar papers)

35 pages, November 30, 2012

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