Consumption based estimates of urban Chinese growth |
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| Institution: | 1. Department of Economics, Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Malaysia;2. Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, Malaysia;1. University of Warsaw, Faculty of Economic Sciences, Poland; University of Illinois, Urbana, IL 61801-3671, United States;2. University of Illinois, Regional Economics Applications Laboratory, Urbana, IL 61801-3671, United States;1. Department of International Economics & Trade, Nanjing University, 22 Hankou Road, Nanjing, 210093, PR China;2. School of International Trade and Economics, Central University of Finance and Economics, 39 South College Road, Haidian District, Beijing, 100081, PR China |
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| 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% per year in 1993–2005. This figure is slightly larger than the 5.9% 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. This result supports the view that Chinese price statistics are reliable. 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. |
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