Urban-Rural Consumption Inequality in China from 1988 to 2002: Evidence from Quantile Regression Decomposition

Zhaopeng Qu () and Zhong Zhao

No 3659, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: One of the most notable social phenomena in China is the large urban-rural disparity. There are many studies of it, but most of them focus on income or earnings inequality. In this paper, we investigate the consumption disparity between urban and rural households in China from 1988 to 2002. Our results suggest that low quantiles are associated with large consumption disparity. The price effect is the dominant factor for the urban-rural consumption disparity. This disparity increased significantly, both at mean and at every quantile, from 1988 to 2002. However, most of the increase happened from 1988 to 1995, and this increase was mainly from the higher growth rate of urban household consumption. Our results also suggest that rural-urban migration and improvement of the rural educational level are very helpful in reducing urban-rural disparity.

Keywords: inequality; consumption; quantile regression decomposition; China (search for similar items in EconPapers)
JEL-codes: C15 O18 O53 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2008-08
New Economics Papers: this item is included in nep-agr, nep-cna, nep-dev, nep-lab and nep-tra
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Citations: View citations in EconPapers (7)

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