EconPapers    
Economics at your fingertips  
 

ESTIMATING INCOME INEQUALITY IN CHINA USING GROUPED DATA AND THE GENERALIZED BETA DISTRIBUTION

Duangkamon Chotikapanich, D.S. Prasada Rao () and Kam Ki Tang

Review of Income and Wealth, 2007, vol. 53, issue 1, 127-147

Abstract: There are two main types of data sources of income distributions in China: household survey data and grouped data. Household survey data are typically available for isolated years and individual provinces. In comparison, aggregate or grouped data are typically available more frequently and usually have national coverage. In principle, grouped data allow investigation of the change of inequality over longer, continuous periods of time, and the identification of patterns of inequality across broader regions. Nevertheless, a major limitation of grouped data is that only mean (average) income and income shares of quintile or decile groups of the population are reported. Directly using grouped data reported in this format is equivalent to assuming that all individuals in a quintile or decile group have the same income. This potentially distorts the estimate of inequality within each region. The aim of this paper is to apply an improved econometric method designed to use grouped data to study income inequality in China. A generalized beta distribution is employed to model income inequality in China at various levels and periods of time. The generalized beta distribution is more general and flexible than the lognormal distribution that has been used in past research, and also relaxes the assumption of a uniform distribution of income within quintile and decile groups of populations. The paper studies the nature and extent of inequality in rural and urban China over the period 1978 to 2002. Income inequality in the whole of China is then modeled using a mixture of province‐specific distributions. The estimated results are used to study the trends in national inequality, and to discuss the empirical findings in the light of economic reforms, regional policies, and globalization of the Chinese economy.

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (47)

Downloads: (external link)
https://doi.org/10.1111/j.1475-4991.2007.00220.x

Related works:
Working Paper: Estimating Income Inequality in China Using Grouped Data and the Generalized Beta Distribution (2006) Downloads
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:revinw:v:53:y:2007:i:1:p:127-147

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0034-6586

Access Statistics for this article

Review of Income and Wealth is currently edited by Conchita D'Ambrosio and Robert J. Hill

More articles in Review of Income and Wealth from International Association for Research in Income and Wealth Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-04-07
Handle: RePEc:bla:revinw:v:53:y:2007:i:1:p:127-147