Scandinavian Working Papers in Economics

Working Paper Series,
Stockholm School of Economics, China Economic Research Center

No 2012-21: Rural Household Income in China: Spatial-Temporal Disparity and Its Interpretation

Yuheng Li ()
Additional contact information
Yuheng Li: China Economic Research Center, Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden

Abstract: This paper investigates the spatial-temporal disparity evident in rural household incomes at the provincial level in China in the period 1978-2007. The research is introduced through a framework comprising the transitional processes of decentralization, marketization, urbanization, and globalization. The research uses Moran’s I index and the spatial regression model. Research results show a clear spatial-temporal disparity in rural household incomes in China in the post-reform era, whereby the eastern provinces possess higher rural household incomes in comparison to the lower rural household incomes of the inland provinces. This disparity is attributed to the joint influence of processes of marketization, urbanization, and globalization upon household incomes derived from the non-agricultural industries. Decentralization proves to be non-significant in explaining the disparity in rural household incomes across China, as a result of the agricultural income generated from the limited household land allocated to each rural household.

Keywords: Rural household income; spatial-temporal; Moran’s; transitional process; China

JEL-codes: N95; O11; R11; R58

29 pages, April 18, 2012

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