Regional inequality in urban China, allowing for spatial cost of living differences: Evidence from a hedonic analysis of apartment prices

Chao Li, John Gibson and Geua Boe‐Gibson
Authors registered in the RePEc Author Service: Geua Boe-Gibson

Asia and the Pacific Policy Studies, 2019, vol. 6, issue 2, 170-185

Abstract: Studies of inequality in China typically ignore cost of living differences between areas. Under the Balassa–Samuelson effect, nontradeables cost more in richer areas, so nominal inequality exceeds real inequality. This especially matters in China, where spatial cost of living differences should grow with recent development of urban housing markets. We use new data on apartment prices in 104 cities in China to develop housing‐related spatial deflators. The level of spatial inequality in urban China is overstated by 27% if cost of living differences are ignored. Our hedonic analysis of 41,000 individual apartment sales shows that most price variation is between areas, rather than from features of individual apartments. The dominant trend in the reform era is for regional inequality in China to decline, contrary to the common perceptions. In nominal terms, the Theil index for interprovincial inequality in 2016 is just 46% of its 1978 level. The current results imply that the fall in inequality in real terms would be even greater.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/app5.272

Related works:
Working Paper: Regional inequality in urban China, allowing for spatial cost of living differences: Evidence from a hedonic analysis of apartment prices (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:asiaps:v:6:y:2019:i:2:p:170-185

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=2050-2680

Access Statistics for this article

More articles in Asia and the Pacific Policy Studies from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().