Using Engel curves to measure CPI bias for Indonesia

To measure real income growth over time, a price index is needed to adjust for changes in the cost of living. The consumer price index (CPI) is often used for this task; but several country studies show that it is a biased measure of such changes, leading to potentially inaccurate estimates of the rate of real income growth. This paper calculates CPI bias for urban Indonesia by estimating food Engel curves for households with the same level of CPI-deflated incomes at four different points in time between 1993 and 2008. The results suggest that CPI bias was negative during the 1997–98 crisis but has been positive since 2000. From 1993 to 2008, CPI bias averaged 4% annually, equivalent to almost one-third of the measured inflation rate.     

A Bite of China: Food consumption and carbon emission from 1992 to 2007

In conjunction with the rapid rise in household food expenditures per capita, China's food consumption has increased greatly. At the same time, dietary patterns have changed dramatically, as between 1992 and 2007 China underwent a transition to a more animal-based westernized diet. This rise in food consumption and shift in dietary structure may contribute substantially to climate change. In this paper, an input-output model is used to explore the food-related carbon emissions of Chinese urban households in 1992 and 2007. The results indicate that the physical volume of and economic expenditures on food consumption have increased by 20.7% and 35.9%, respectively. However, food-related carbon emissions per capita in 2007 had decreased nearly 21% compared to emissions in 1992. Based on parametric estimates of environmental Engel Curves and the Oaxaca-Blinder decomposition, the variation in household income may lead to a hypothetical carbon emissions increase of 1.694 tons. However, the improvement in energy use efficiency had offset the impact from income growth and dietary transition and led to the drop in China's food-related carbon emissions from 1992 to 2007.     

REGIONAL INCOME INEQUALITY IN INDONESIA AND THE INITIAL IMPACT OF THE ECONOMIC CRISIS

This paper estimates regional income inequality from 1993 to 1998, using a Theil index based upon district-level GDP and population data. Between 1993 and 1997, when Indonesia's annual average growth rate exceeded 7%, regional income inequality rose significantly. A two-stage nested inequality decomposition analysis indicates this was due mainly to an increase in within-province inequality, especially in Riau, Jakarta and West and East Java. In 1997, the within-province component represented about 50% of regional income inequality. The crisis caused per capita GDP growth to revert to its 1995 level, but the impact was spread unevenly across provinces and districts. In 1998 regional income inequality declined to its 1993-94 level. In contrast to 1993-97, three-quarters of the 1998 decline was due to a change in between-province inequality, with the Java-Bali region playing a prominent role. The crisis appears particularly to have afflicted urban Java and urban Sumatra.     

中国各地区城乡收入收敛性实证研究

使用1991-2011年的人均收入和CPI数据,对中国东、中、西、东北部地区进行了β和σ收敛分析,实证表明:东部地区城镇、农村人均收入在1991-2011年不存在σ收敛、β收敛,即东部地区城镇、农村人均收入差距都在不断扩大;中部地区城镇、农村人均收入在1991-2011年均存在σ收敛、β收敛,且城镇人均收入每年以17.333%的速度收敛,农村人均收入每年以8.333%的速度收敛;东北地区城镇人均收入差距在不断扩大,而东北地区的农村收入每年以3.378%的速度收敛;西部地区城镇人均收入差距在缩小,每年以8.174%的速度趋于一致,而农村人均收入差距在不断扩大;中部地区人均收入在城镇、农村上收敛速度均为最大。     

LINKING POVERTY AND INCOME SHOCKS TO RISKY SEXUAL BEHAVIOUR: EVIDENCE FROM A PANEL STUDY OF YOUNG ADULTS IN CAPE TOWN

Is there a link between household income and income stress, and risky sexual behaviour of young people? Anecdotal and qualitative evidence suggests this may be the case, but there is little quantitative research measuring this relationship. We use two waves of new data from the Cape Area Panel Study to investigate this link for 2,993 African and coloured youths aged 14 to 22 in 2002. In the process, we discuss one type of research design that could allow for a causal interpretation of the effect of income poverty on HIV risk. This design plausibly separates out the effect of income stress from the effect of living in a poor household by comparing behaviours across households with and without negative economic shocks, conditional on baseline income. Our results indicate that females in poorer households are more likely to be sexually active in 2002 and more likely to sexually debut by 2005. In addition, girls in households experiencing negative economic shocks are more likely to reduce condom use between 2002 and 2005. However, they are less likely to have multiple partners in 2002 or have transitioned to multiple partners by 2005. Males who experienced a negative shock are more likely to have multiple partners. Despite the tight research design for assessing shocks, the findings on the impacts of shocks do not generate clear recommendations for policy. There appears to be no systematic difference in condom use at last sex by household income levels or income shocks.     

Financial instruments of the poor: initial findings from the South African Financial Diaries study

A new data set called the South African Financial Diaries has been produced, based on a sample of 166 households, drawn from three different areas in South Africa – Langa, Lugangeni and Diepsloot. The selected households represent a range of dwelling types and wealth categories. A unique methodology was used to create a year-long daily data set of every income, expense and financial transaction used by every one of these households. Within this sample, households used, on average, 17 different financial instruments over the course of the study year. A composite household portfolio, based on all 166 households, would have an average of four savings instruments, two insurance instruments and 11 credit instruments. The same composite household portfolio would have about 30 per cent formal instruments and 70 per cent informal instruments. Interestingly, it was found that rural households use as many financial instruments as urban ones.     

Intergenerational income persistence and transmission mechanism: Evidence from urban China

In this paper I investigate the intergenerational income association and its transmission channels amid China's economic transition period using urban data from the Chinese Household Income Projects in 1995 and 2002. The estimated intergenerational income elasticity is 0.43 and 0.51 for cohorts educated prior to and after the market reform respectively, and reaches 0.71 among households with above average income in the post-reform era. Besides the conventional channel of education, this paper estimates the contribution from social capital and ownership of work unit across cohorts and income groups. There is weak evidence that prior to market reform, ownership of work unit contributes most to the intergenerational income persistence for households with below average income, while social capital leads the three contributors in households with above average income. However, in the post-reform era, parents with below average income invest statistically significantly in children's education which contributes most to the intergenerational income persistence. The leading contributor in families with above average income shifts to social capital. Possible explanations for such a shift lie in the ability and incentive of parents from different income categories to invest in their children. The results are tested through a series of robustness checks, and provide empirical support for promoting policies on the equality of opportunity.     

西部地区城乡收入收敛性实证研究

使用1991-2011年的人均收入和CPI数据,文章对中国西部地区各省的城乡收入进行了β和σ收敛分析,结果表明:1991-2011年西部地区城镇居民在收入增长率上存在显著的绝对β收敛,在收入水平上也存在σ收敛;农村居民在收入增长率上不存在显著的绝对β收敛,在收入水平也不存在σ收敛;西部地区城乡收入差距因农村收入差距加大而逐步扩大;各个省份的城乡收入差距对西部地区整体城乡收入差距的影响不等,以贵州、云南、甘肃、内蒙古的城乡收入差距影响最大。     

The impact of circular migration on a village economy

The author examines the economy of a rural village in Indonesia in which a high proportion of households rely on remittances from urban informal sector earnings. Household income and per capita income are analyzed according to whether or not households have at least one temporary migrant, and by the sex and age of the household head. Findings indicate that "remittances from short-term circular migration push many households into the middle and upper income ranges. However, the wealthiest households continue to rely on traditional high earning activities and do not depend on remittances. The poorest households are scattered among those who rely on remittances and those still totally dependent upon traditional low earning village activities, regardless of the sex and age of the household head."     

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.     

Preferential policies and income inequality: Evidence from Special Economic Zones and Open Cities in China

This paper examines whether cities with preferential policies have higher inequality in household disposable income per capita than cities without preferential policies in urban China. “Preferential policies” refers to the autonomy and deregulation given to Special Economic Zones (SEZs) and Open Cities, allowing them to experiment with market policies and reforms, as the country moves from a state-controlled economy towards a market-oriented economy. While the effect of these policies on economic growth is extensively documented, their relationship with income inequality remains undetermined. Subgroup decompositions of income inequality, using the China Household Income Project's urban datasets of over 6000 households and 20,000 individuals from of up to 70 cities from 12 provinces, were used to identify income inequality gaps between cities with and without preferential policies. The results reveal that while income inequality increased in urban China from 1988 to 2007, the change was lower for cities awarded preferential policies across regions. Furthermore, the decompositions by region indicate that cities receiving preferential policy treatment had higher income growth but a lesser increase in income inequality than cities without preferential policies in each region. Finally, cities receiving preferential policies were able to increase the share of income of the poorest 40% of households while reducing the share of the richest 10%.     

Situation analysis of an informal settlement in the Vaal Triangle

The United Nations Children's Fund (UNICEF) has indicated that urban poverty is found primarily in squatter settlements. At present one in seven (13,5 per cent) of all South African households live in informal settlements. The major research question is to what extent the interlocking micro-mechanisms identified by UNICEF as causes of malnutrition influence the nutrition and health of residents in an informal settlement in the Vaal Triangle. This question will be tested empirically against the UNICEF framework of immediate, underlying and basic causes of malnutrition. Pre-tested questionnaires were administered to 340 randomly selected care-givers. A previously validated quantified food frequency questionnaire was administered by trained enumerators as the test measurement, and 24-hour recall as the reference measurement, for dietary intake and food consumption patterns. The data were statistically analysed for means and standard deviations. The great majority of the respondents (nine out of ten) live in corrugated iron shacks, and overcrowding is common; 32 per cent live in two rooms or fewer, 44 per cent in three to four rooms and 24 per cent in more than four rooms. Thirty-one per cent of the households consisted of six or more members, 19 per cent of five members, 22 per cent of four members and 28 per cent of three or fewer members. The unemployment rate was 94 per cent for respondents and 80 per cent for their partners. Two-thirds of care-givers (69 per cent) have an income below R500 per month. The main health problems that were observed were chronic coughing (44 per cent) and headaches (54 per cent). The causes of these were not established. Diets were poor and consisted overwhelmingly of refined carbohydrates. The top 10 food items consumed were: stiff and soft maize meal porridge, brewed rooibos and leaf tea, coffee, mabela, white bread, crumbly maize porridge, carbonated cold drink and mageu. The daily intakes (mean and standard deviation) of various nutrients were: 4550?±?1993 kJ energy, 20?±?9 g protein, 21?±?21 g fat and 182?±?78 g carbohydrates. The results indicate that this is a poverty-stricken community with chronic household food insecurity and compromised nutrition. It is hoped that the knowledge gained from this survey will improve the planning and implementation of sustainable community-based interventions to promote urban household food security and combat nutrition-related diseases.     

The Costs of Missing the Millennium Development Goal on Gender Equity

At the Millennium Summit, the world community pledged to promote gender equality and chose as a specific target the achievement of gender equity in primary and secondary education by the year 2005 in every country of the world. Based on the findings from a growing empirical literature that suggests that gender equity in education promotes economic growth, reduced fertility, child mortality, and undernutrition, we estimate what the costs in terms of growth, and forgone fertility, mortality and undernutrition reduction, will be for the 45 countries that are, on current projections, unlikely to meet the target. Our estimates suggest that, by 2005, the countries that are off track are likely to suffer 0.1–0.3 percentage points lower per capita growth rates as a result, will have 0.1–0.4 more children per woman, and, by 2015, an average of 15 per 1,000 higher rates of under five mortality, and 2.5 percentage points higher prevalence of underweight children under five. Sensitivity analyses suggest that the results are quite robust to using different specifications and approaches to estimating these losses.     

Going Home: Evacuation-Migration Decisions of Hurricane Katrina Survivors

In the wake of Hurricane Katrina, many evacuees from the Gulf region began the difficult process of deciding whether to rebuild or restart elsewhere. We examine pre-Katrina Gulf residents' decision to return to the postdisaster Gulf region—which we call the “return migration” decision. We estimate two separate return migration models, first using data from a mail survey of individuals in the affected region and then focusing on self-administered questionnaires of evacuees in Houston. Our results indicate that return migration can be affected by household income; age; education level; and employment, marital, and home ownership status, but the results depend on the population under consideration. We find no effect of “connection to place” on the return migration decision. Although the effect of income is relatively small within subsamples, we find a much higher proportion of middle income households planning to return than lower income households when comparing across the subsamples. In addition, the real wage differential between home and host region influences the likelihood of return. Larger implicit costs, in terms of foregone wages for returning, induce a lower likelihood of return. Exploiting this difference at the individual level, we are able to produce estimates of willingness to pay (WTP) to return home. Average WTP to return home for a sample of relatively poor households is estimated at $1.94 per hour or $3954 per year.     

Relative efficiency in Chinese urban construction: A comparison of state-owned and collective enterprises after reform

This paper estimates the relative efficiency of locally-controlled urban collective and provincially-controlled state-owned enterprises in the Chinese construction industry between 1985 and 1988, a period following significant economic reforms. A generalized restricted translog cost function approach is used which allows for both fixed and variable factor choices to deviate from profit-maximizing outcomes. Results indicate that collectives were less efficient in this sample than state-owned enterprises in the use of variable inputs, and this gap was not closing by 1988. State-owned enterprises were, however, much less efficient in the use of capital, even when the measure of capital is adjusted for a relatively higher percentage of nonproductive investment. For both sectors of Chinese construction, the growth rate of total factor productivity (or average technical efficiency) rose to approximately four percent per year by 1988, but this improvement did not extend to more cost-efficient combinations of inputs.     

Working Women in an Urban Setting: Traders,Vendors and Food Security in Accra

Data collected from a 1997 household survey carried out in Accra, Ghana are used to look at the crucial role that women play as income earners and securing access to food in urban areas. One-third of the households surveyed are headed by women. For all households, women's labor force participation is high with 75% of all households having at least one working woman. The high number of female-headed households and the large percentage of working women in the sample provide a good backdrop for looking at how women earn and spend income differently than men in an urban area. Livelihood strategies for both men and women are predominantly labor based and dependent on social networks. For all households in the sample, food is still the single most important item in the total budget. Yet, important and striking differences between men's and women's livelihoods and expenditure patterns exist. Compared to men, women are less likely to be employed as wage earners, and more likely to work as street food vendors or petty traders. Women earn lower incomes, but tend to allocate more of their budget to basic goods for themselves and their children, while men spend more on entertainment for themselves only. Despite lower incomes and additional demands on their time as housewives and mothers, female-headed households, petty traders and street food vendors have the largest percentage of food-secure households. Women may be achieving household food security, but at what cost? This paper explores differences in income, expenditure and consumption patterns in an effort to answer this question, and suggests ways that urban planners and policy makers can address special concerns to working women in urban areas.     

The end of destitution: evidence from urban British working households 1904-37

We estimate the reduction, almost to elimination, of absolute poverty among working households in urban Britain between 1904 and 1937. We exploit two recently-digitized data sets. The paper presents a statistical generalization, to working families in the whole of urban Britain, of the poverty decline found in the town studies by, amongst other, Bowley and Rowntree. We offer corroborative evidence and perform a simulated decomposition of the poverty reduction into its proximate causes. The two most important causes were the rise, 1904–37, of about 30% in real wages on the one hand and the reduction of one-third in the number of people in the average household over the same period. Between them, these two changes imply a near doubling of the income per capita of an average household supported by a worker on the average wage. We conclude with a discussion of deeper causes.     

An investigation into food-away-from-home consumption in South Africa

Food policy that ignores food-away-from-home (FAFH) in a developing country like South Africa will be misleading given changes in demand for food over time. This study contributes to our understanding of the factors that influence the demand for FAFH in South Africa. Using panel data from the Income and Expenditure Survey, this study analyses the effects of income and socio-demographic variables on FAFH expenditure using a double-hurdle model. The results show that small-sized households headed by younger white females/males and living in an urban settlement are most likely to purchase FAFH while male-headed households spend more than female-headed households. Furthermore, income of the household head is an important determinant of household FAFH expenditures. The income elasticity of expenditure on FAFH is inelastic and a normal good. The small size of the participation elasticities means that growth in the FAFH sector will be driven by households with existing expenditure.     

Poverty in Edwardian Britain

This article introduces a newly discovered household budget data set for 1904. We use these data to estimate urban poverty among working families in the British Isles. Applying Bowley's poverty line, we estimate that at least 23 per cent of people in urban working households and 18 per cent of working households had income insufficient to meet minimum needs. This is well above Rowntree's estimate of primary poverty for York in 1899 and high in the range that Bowley found in northern towns in 1912–13. The skill gradient of poverty is steep; for instance, among labourers' households, the poverty rates are close to 50 per cent. Measures of the depth of poverty are relatively low in the data, suggesting that most poor male-headed working households were close to meeting Bowley's new standard.     

Food Demand Characteristics in Uganda: Estimation and Policy Relevance

Uganda was highly successful in reducing poverty over the past two decades but made little progress towards household food security. This underlines the need for designing food security interventions customised for household‐specific needs and behaviours. This study estimates Ugandan household demand behaviour with a focus on food consumption paying particular attention to household‐specific characteristics. The results show that preferences to increase calorie‐dense staple consumption, likely associated with food energy deficiency, extend far beyond the percentage of rural Ugandans officially deemed poor. Price elasticities indicate that poor rural households are largely well positioned to compensate staple price increases by substitution as long as they are not already concentrated on the cheapest foods. This flexibility applies less to urban households. The estimated demand elasticities generally vary widely between rural and urban households and depend on expenditure levels. Household‐specific characteristics have significant, sometimes pronounced, influences on demand, as do seasons and regions. The results reflect highly differentiated demand behaviour, which can be utilised to improve the design and evaluation of food security interventions.