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2. Poverty, Pro-Poor Growth and Mobility: A Decomposition Framework with Application to China
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 12-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper proposes a framework for incorporating longitudinal distributional changes into poverty decomposition. It is shown that changes in the Sen-Shorrocks-Thon index over time can be decomposed into two components—one component reflects the progressivity of income growth among the original poor, the other measures the extent of downward mobility experienced by the incumbent poor. The decomposition is applied to appraising poverty trends in China between 1988 and 1996. The results indicate that the proposed decomposition can complement the widely-used growthdistribution decomposition in providing insights into poverty dynamics.
- Topic:
- Development and Poverty
- Political Geography:
- China and Asia
3. Poverty Reduction in China: Trends and Causes
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 12-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Applying the Shapley decomposition to unit-record household survey data, this paper investigates the trends and causes of poverty in China in the 1990s. The changes in poverty trends are attributed to two proximate causes; income growth and shifts in relative income distribution. The Foster-Greer-Thorbecke measures are computed and decomposed, with different datasets and alternative assumptions about poverty lines and equivalence. Among the robust results are: (i) both income growth and favourable distributional changes can explain China's remarkable achievement in combating poverty in rural areas in the first half of the 1990s; (2) in the second half of the 1990s, both rural and urban China suffered from rapidly rising inequality and stagnant income growth, leading to a slow-down in poverty reduction, even reversal of poverty trend.
- Topic:
- Development, Economics, and Poverty
- Political Geography:
- China and Asia
4. The Impacts of Growth and Inequality on Rural Poverty in China
- Author:
- Guanghua Wan and Yin Zhang
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper analyzes the evolution of poverty in China from the late 1980s to the late 1990s, employing a version of Shapley decomposition tailored to unit-record household survey data. The changes in poverty trends are attributed to two proximate causes— income growth and shifts in income distribution. Different datasets, poverty lines, poverty measures, and equivalence scales are used to examine the robustness of the results. Potential biases arising from ignoring differential regional prices and inflation are also investigated. Notwithstanding some ambiguities in the results, it is consistently found that rural poverty increased in the second half of the 1990s and adverse distributional changes are the main cause.
- Topic:
- Demographics, Development, and Poverty
- Political Geography:
- China and Asia
5. The Inequality-Growth Nexus in the Short and Long Runs: Empirical Evidence from China
- Author:
- Guanghua Wan, Zhao Chen, and Ming Lu
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper argues that the conventional approach of data averaging is problematic for exploring the growth—inequality nexus. It introduces the polynomial inverse lag (PIL) framework so that the impacts of inequality on investment, education, and ultimately on growth can be measured at precisely defined time lags. Combining PIL with simultaneous systems of equations, we analyze the growth—inequality relationship in postreform China, finding that this relationship is nonlinear and is negative irrespective of time horizons.
- Topic:
- Civil Society, Development, and Education
- Political Geography:
- China and Asia
6. Poverty Accounting by Factor Components: With an Empirical Illustration Using Chinese Data
- Author:
- Guanghua Wan
- Publication Date:
- 06-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The purpose of this paper is to develop two poverty decomposition frameworks and to illustrate their applicability. A given level of poverty is broadly decomposed into an overall inequality component and an overall endowment component in terms of income or consumption determinants or input factors. These components are further decomposed into finer components associated with individual inputs. Also, a change in poverty is decomposed into components attributable to the growth and redistributions of factor inputs. An empirical illustration using Chinese data highlights the importance of factor redistributions in determining poverty levels and poverty changes in rural China.
- Topic:
- Development, Economics, and Poverty
- Political Geography:
- China and Asia
7. Income Inequality in Rural China: Regression-based Decomposition Using Household Data
- Author:
- Guanghua Wan and Zhangyue Zhou
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- A considerable literature exists on the measurement of income inequality in China and its increasing trend. Much less is known, however, about the driving forces of this trend and their quantitative contributions. Conventional decompositions, by factor components or by population subgroups, only provide limited information on the determinants of income inequality. This paper represents an early attempt to apply the regression-based decomposition framework to the study of inequality accounting in rural China, using household level data. It is found that geography has been the dominant factor but is becoming less important in explaining total inequality. Capital input emerges as a most significant determinant of income inequality. Farming structure is more important than labour and other inputs in contributing to income inequality across households.
- Topic:
- Demographics, Development, and Economics
- Political Geography:
- China and Asia
8. Spatial Decomposition of Inequality
- Author:
- Guanghua Wan and Anthony Shorrocks
- Publication Date:
- 01-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper reviews the theory and application of decomposition techniques in the context of spatial inequality. It establishes some new theoretical results with potentially wide applicability, and examines empirical evidence drawn from a large number of countries.
- Topic:
- Development, Globalization, and Poverty