Food Price Crisis,Poverty, and Inequality

This paper simulates how a doubling of food prices affects absolute poverty and the food‐price‐adjusted real income distribution. We assume unsubsidized world food prices in order to derive the cost of poverty deepening and poverty expansion. We also estimate the degree to which inequality increases if no measures are put in place to offset rising food prices. Both measures are vulnerability indicators useful for social policy planning. Our results show that low‐income countries experience dramatic increases in absolute poverty as a result of doubling food prices. Middle‐income countries experience the greatest decrease in absolute income, which contributes most to an increase in world income inequality. The paper estimates that the global dollar value of the absolute poverty gap ($1.25/day) has the potential to increase by 400%, with poverty deepening accounting for two thirds of the increase.     

The Influence of Demographics and Household-Specific Price Indices on Consumption-Based Inequality and Welfare: A Comparison of Spain and the United States

Previous research has suggested that inequality is lower in Spain than in the United States when it is based on income. For the present article, both inequality and social welfare are examined, with household consumption expenditures used as a proxy for household welfare. For tractability, equivalence scales depended only on the number of people in the household. Household-specific price indices were used to express the 1990-1991 expenditure distributions in 1981 and 1991 winter prices. Our results reveal that inequality and welfare comparisons are drastically different for smaller and larger households. When all households are considered, the two-country comparison suggests that the income inequality ranking can only be maintained for expenditure distributions when economies of scale are small or nonexistent. However, welfare is always higher in the United States than in Spain. Because inflation during the 1980s in both countries was essentially distributionally neutral, all results appear to be robust to the choice of time period.     

Smaller Real Regional Income Gap than Nominal Income Gap： A Price-adjusted Study

I. IntroductionSince China’s reform and opening-up, its economy has witnessed rapid growth togetherReal Regional Income Gap39 ?2006 The Authors Journal compilation ?2006 Institute of World Economics and Politics, Chinese Academy of Social Sciences with a substantial increase in household income. Sustained rapid economic growth has led to an increasingly larger “pie” for distribution. According to the National Bureau of Statistics of China preliminary estimation indicated that GDP …     

Trade openness and income inequality in China and the SAARC Region

The paper empirically examines the effects of trade liberalisation on income inequality in China and the South Asian Association for Regional Cooperation countries. Panel data analysis is conducted for the period of 1973 to 2012. The results show that liberal trade policies have increased income inequality in these countries. These results are robust to alternative liberalisation measures. The control variables used have differing effects on income distribution. Per capita income has an increasing effect on income inequality, while education, financial development, financial openness, democracy, and government size are shown to reduce income inequality. These outcomes can be expected to have important policy implications for the use of trade liberalisation in these countries.     

Income inequality and access to housing: Evidence from China

Economic theory suggests that income inequality predicts housing price and housing affordability for low-income households. Employing Chinese urban household survey data, this paper examines empirically the relationship between income inequality and access to housing for urban low-income households. The empirical results demonstrate that higher income inequality within cities is significantly related to a higher housing cost burden, a smaller per capita living space, and lower housing quality for low-income households. Further studies demonstrate that the negative impacts of income inequality could be moderated by product differentiation in housing markets, as a higher degree of differentiation in the size of housing units corresponds to a smaller effect of income inequality on housing affordability.     

Rural-urban Migration and Dynamics of Income Distribution in China： A Non-parametric Approach

Extending the income dynamics approach in Quah (2003), the present paper studies the enlarging income inequality in China over the past three decades from the viewpoint of rural–urban migration and economic transition. We establish non‐parametric estimations of rural and urban income distribution functions in China, and aggregate a population‐weighted, nationwide income distribution function taking into account rural–urban differences in technological progress and price indexes. We calculate 12 inequality indexes through non‐parametric estimation to overcome the biases in existing parametric estimation and, therefore, provide more accurate measurement of income inequality. Policy implications have been drawn based on our research.     

Exploring the Impact of Energy Sources on Production,Inequality and Poverty in Simultaneous Equations Models for South Africa

Abstract: This work adapts per capita income, energy demand (sub‐group decomposed), inequality and poverty frameworks in a simultaneous equations setting to investigate the role of energy sources on per capita income, inequality and poverty in South Africa. It finds that energy sources (particularly electricity and diesel) are important in estimating production functions. Gasoline, kerosene and coal all exacerbate poverty, with the highest impacts on abject poverty. It is better to disaggregate energy sources in order to capture resource‐specific details. Redistribution efforts that focus on reduction of between‐group inequality can also moderate energy use since between‐group inequality tends to increase the demand for most energy sources. Public efforts are yielding fruits in this direction and should be encouraged. Access to energy sources like electricity, diesel and gas are crucial for productivity enhancement, but for them to yield significant anti‐poverty fruits, efforts must also target broadening capital access by the poor.     

In‐Group versus Out‐Group Trust: The Impact of Income Inequality

In this article, we adopt a variant of the trust game by Berg, Dickhaut, and McCabe (1995) and the dictator game by Cox (2004) to determine if income inequality can activate in‐group favoritism and, if so, whether such a bias is strong enough to survive the removal of income inequality. We find evidence of in‐group favoritism only on the part of rich first movers. Rich first movers trust their in‐group members significantly more in the presence of income inequality not only before but also after they gain enough experience. Poor first movers, in contrast, do not exhibit such in‐group bias. They do not discriminate between in‐group and out‐group at the very outset of the experiment, and once they become experienced, they behave with significantly more trust toward the rich than toward the poor. We also find that in‐group and out‐group favoritism established in the past can be alleviated, but not completely removed, by an equal income distribution.     

Decomposing income inequality in a backward pre‐industrial economy: Old Castile (Spain) in the middle of the eighteenth century

Research on economic inequality in early modern Europe is complicated by the lack of appropriate data for reconstructing income or wealth distributions. This article presents a study of income inequality in mid‐eighteenth‐century Old Castile (Spain) using the Ensenada Cadastre, a census conducted between 1749 and 1759. The article describes the information provided by this census and then discusses its advantages and disadvantages for reconstructing income profiles and calculating income inequality. This is followed by analysis of a dataset derived from the Cadastre that consists of more than 4,000 observations from Palencia (a province in northern Spain) and contains information on sources of household income, each household head's main occupation, residence location, and other household characteristics. Demographic data from this census is used to weight observations in the sample and thereby minimize selection bias. Findings show that inequality in eighteenth‐century Spain was probably substantial despite its relative backwardness; that the relationship between inequality and per capita income was not clear‐cut and was probably influenced by measurement of the higher incomes; and that although income inequality was largely driven by uneven land distribution, labour income also contributed to overall inequality—especially in urban centres.     

Economic Restructuring,Informal Jobs and Pro‐poor Growth in Urban China

Based on household survey datasets and the framework of pro‐poor growth, the present paper discusses how economic growth and inequality affect poverty reduction in urban China. The findings in this paper suggest that the poor benefit from economic growth through the trickle‐down effect, but that the poor benefit disproportionally less than the nonpoor in both periods, from 1988 to 1995 and from 1995 to 2002; however, in the latter period, the pro‐poorness is higher than that of the former period. Using the principle of Shapley decomposition, this paper develops an index of pro‐poor growth for each income component, and finds that the income from informal jobs is the main contributor to the pro‐poorness of growth during the period 1995 to 2002.     

DETERMINANTS OF DEMAND FOR FIJI'S EXPORTS: AN EMPIRICAL INVESTIGATION

Fiji is no exceptin to the rule that exports are an important source of growth and development. In this light, it is important to know the determinants of exports. However, there is no empirical study on Fiji's export demand. This paper uses the modern econometric techniques—in particular, the autoregressive distributed lag approach to cointegration—to investigate whether the standard export demand variables, viz., trading partner income, export price, and competitor price, have a long‐run cointegration relationship with Fiji's real exports for the period 1970 to 1999. In addition, the long‐run results are also estimated by using the dynamic ordinary least squares and the fully modified ordinary least squares. The empirical results indicate the existence of a cointegration relationship among the variables. The long‐run foreign income, own‐price, and cross‐price elasticities are found to be 0.7 to 0.8, −1.3 to −1.5, and 2.1 to 2.2, respectively.     

ELECTRICITY REFORMS IN MALI: A MACRO–MICRO ANALYSIS OF THE EFFECTS ON POVERTY AND DISTRIBUTION

This paper uses a computable general equilibrium (CGE) micro-simulation model to explore the distributional and poverty-related effects of price reform in the electricity sector of Mali, a poor country in West Africa. In the first part of the paper we analyse the distribution of electricity in Mali by income deciles, showing that few poor households are connected to the electricity grid. We then apply a sequential CGE micro-simulation model to track the transmission mechanisms between increases in electricity prices and changes in poverty and inequality among different household groups. Our results show that direct price increases have a minimal effect on poverty and inequality, whereas the general equilibrium effects of such increases are quite strong and negative. The compensating policies we tested do not help those who lose from the pricing reform. In fact they amplify the negative effects.     

Wages and Wage Inequality in South Africa 1994–2011: Part 2 – Inequality Measurement and Trends

We analyse the long‐term trends in wage inequality in South Africa, using household survey data. We show that the trends in household income inequality are largely driven by changes in wage inequality. Given the detailed nature of our series we show that measurement issues and breaks in the series need to be dealt with in order to draw robust conclusions from the data. Most standard inequality measures show that wage inequality has increased over the period. Nevertheless the choice of measure matters, because there are different trends in different parts of the distribution. It appears that the distribution below the median has become more compressed, while the top of the wage distribution has moved away from the median. The inequality in the labour market translates into even higher inequality in society given that high earners tend to live together with other high earners while low wage individuals often end up sharing their incomes with the unemployed. Furthermore there are many South Africans with access to no wage income. Given the trends analysed here it is not surprising that overall inequality in South Africa has not come down or has even increased since the end of apartheid.     

Wages and Wage Inequality in South Africa 1994–2011: Part 1 – Wage Measurement and Trends

We analyse the long‐term trends in wage inequality in South Africa, using household survey data. We show that the trends in household income inequality are largely driven by changes in wage inequality. Given the detailed nature of our series we show that measurement issues and breaks in the series need to be dealt with in order to draw robust conclusions from the data. Most standard inequality measures show that wage inequality has increased over the period. Nevertheless the choice of measure matters, because there are different trends in different parts of the distribution. It appears that the distribution below the median has become more compressed, while the top of the wage distribution has moved away from the median. The inequality in the labour market translates into even higher inequality in society given that high earners tend to live together with other high earners while low wage individuals often end up sharing their incomes with the unemployed. Furthermore there are many South Africans with access to no wage income. Given the trends analysed here it is not surprising that overall inequality in South Africa has not come down or has even increased since the end of apartheid.     

Real inequality in the early modern Low Countries: the city of ’s‐Hertogenbosch, 1500–1660

This article studies the welfare effects of economic growth in the early modern Low Countries. It applies the recently developed concept of ‘real inequality’ to a case study of sixteenth‐ and seventeenth‐century ’s‐Hertogenbosch in the Southern Netherlands and demonstrates, by incorporating relative price movements, that specific (and in this case stagnant) nominal income inequality trajectories may disguise underlying shifts in real inequality that are influenced by socially biased relative prices. The analysis is then extended to include changes in demography and household size, which reveals a second important limitation in the study of long‐term economic inequality. In contrast to the stagnation and eventual decline in nominal inequality seen in ’s‐Hertogenbosch during the long sixteenth century (1500–1650), this broadened concept of ‘augmented’ real inequality in fact suggests the occurrence of a significant upturn during the first half of the sixteenth century. Furthermore, while nominal inequality had decreased, real inequality appears to have been higher by the middle of the seventeenth century than it had been around 1500. The study of global and/or long‐term inequality, in particular, would benefit greatly from a proper social, economic, and historical contextualization of these trends, not least in terms of the social biases in relative prices and household composition.     

Macroeconomic Effects of Commodity Price Shocks in a Low‐income Economy: The Case of Tobacco in Malawi

A major concern for developing economies is a dependence on commodities when their prices are volatile as a major change in the international commodity price can have important implications for economic growth. While some cross‐country studies exist, there is lack of country specific studies that take into account the different characteristics of low‐income economies. This paper contributes to the growing literature by considering the case of Malawi and the macroeconomic impact of price shocks in its major export crop of tobacco. Using a structural vector autoregression (SVAR) approach on quarterly Malawian data from 1980:1 to 2012:4, the paper establishes that a positive tobacco price shock has a significant positive impact on the country's gross domestic product, decreasing consumer prices and inducing real exchange rate appreciation. The results are robust to alternative specifications of a SVAR on difference stationary data and cointegrating VAR. The cointegrating VAR confirms the existence of a long run‐relationship among the variables and causality that runs from tobacco prices.     

Income inequality and subjective wellbeing: Panel data evidence from China

Using four waves of longitudinal data from the China Family Panel Studies (CFPS), we examine the effects of income inequality on subjective wellbeing (SWB). We take a dual approach in measuring income inequality, and thus, we examine the effects of inequality using province-level Gini coefficient as well as between-group inequality or identity-related inequality defined as the income gap between migrants without urban household registration identity (hukou) and urban residents. We find negative effects of both province-level income inequality and between-group income inequality on SWB, measured by life satisfaction. Our results also show that the effects of income inequality on SWB is stronger for rural hukou residents compared to urban hukou residents. These findings are robust to alternative ways of measuring SWB and income inequality. In addition, we find evidence suggesting that neighbourhood trust is an important channel through which income inequality operates to reduce SWB. We suggest policies that promote trust in communities with high inequality with a view of addressing the negative effects of inequality on SWB.     

SOURCES OF INCOME DIFFERENCES ACROSS CHINESE PROVINCES DURING THE REFORM PERIOD: A DEVELOPMENT ACCOUNTING EXERCISE

The present paper performs a development accounting analysis to investigate the sources of China's interprovincial income inequality over the period 1982–2005. We estimate a Cobb–Douglas aggregate production function with various specifications. Using the estimated parameters, we conduct a development accounting analysis as well as a variance decomposition. Our results suggest that differences in physical capital intensity and in total factor productivity are both important sources of cross‐province income differences, each accounting for roughly half of the variation in income levels. Differences in human capital explain only a small amount of income differences across provinces. The results are robust to whether or not the assumption of constant returns to scale is imposed. The interaction between factor accumulation and total factor productivity is also discussed.     

收入分配、医疗资源与人口健康:一个跨国研究

收入分配与人口健康的关系是一个争论已久的问题。本文在总结各种理论假说和以往实证研究的基础上,使用新的、质量较好的跨国面板数据,重新检验了收入分配与人口健康的关系。本文的分析重点有二:一是收入分配对人口健康的滞后影响;二是医疗资源在收入分配与人口健康的相关关系中所起的作用。本文的主要发现是,收入不均对人口健康的确有不利影响,但这种不利影响需要10年或更长的滞后期才能充分显现出来,这种滞后性是以往使用固定效应模型的跨国研究未能检测到收入不均与人口健康具有负相关关系的主要原因。此外,医疗资源(特别是初级医疗资源)人均拥有量对人口健康有积极作用;医疗资源有可能通过某种不可观察固定因素对收入分配与人口健康的关系发生影响。这些发现有助于澄清关于收入分配与人口健康关系的争论,对医疗政策也有重要参考价值。     

Decomposing Income Inequality and Policy Implications in Rural China

Using village data from samples covering 6 provinces,36 counties and 216 townships,the income inequalities within and between townships in rural China are assessed. The Theil index and the mean logarithmic deviation methods enable us to test income inequality at the township level,and to decompose it into intra-regional and inter-regional at county and provincial levels. In the present paper,we also decompose income inequalities between and within the nationally designated poor counties (NDPC). The results show that approximately two-thirds of the income inequality in rural China would be eliminated if measures and policies were targeted at the county level. This study also confirms the rationale that China's poverty alleviation strategy of focusing on poor counties based on the inequalities between NDPC and non-NDPC accounts for the most inter-province inequality.