does grassroots democracy reduce income inequality in china abstract using village and household survey data collected from 48 villages of eight chinese provinces for the period 1986 2002 this paper studies how the introduction of village elections affects income distribution at the village level we estimate both a static fixed effect panel model and a dynamic panel model for the within village gini coefficient and take care of the endogeneity of the introduction of elections the dynamic panel model shows that having elections reduces the gini coefficient by 0 04 or 14 3 of the sample average we also find that elections tend to increase the income shares of poorer portions of the population further econometric analysis based on dynamic panel models shows that elections increase per capita public expenditures by 271 yuan but do not increase the level or progressiveness of net or total income transfer in a village therefore elections positive role in reducing income inequality is not played through more income redistribution but through more pro poor public investment

access to markets and rural poverty evidence from household consumption in china abstract this paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural china the econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets we use straight line distances to coastline and navigable river along with the topography of the intervening counties as sources of exogeneous variations we also use identification through heteroskedasticity which does not rely on standard exclusion restrictions the results from alternative identification schemes show that better access to both domestic and international markets has positive effects on per capita consumption the domestic market effect is significantly larger in magnitude and there is complementarity between the access to domestic and international markets

the effect of household wealth on fertiliser use in the presence of uncertainty abstractprevious studies of wealth effect on fertiliser use have produced mixed results on the direction of the impact our article looks at this issue from a different perspective by considering the presence of doubts such as about the true content or general effectiveness of fertiliser we show theoretically that there could be different responses between the high wealth and low wealth farmers we analyse also the wealth effect empirically using household panel data from the hebei province of china the results indicate that the direction of wealth effect does indeed change across the different levels of farmers wealth

supply response and risk in chinese agriculture the main objective of this paper is to model the production and supply response in chinese agriculture which includes not only the standard arguments like expected prices but also risk we extend lin s work 1991 1992 by modelling supply response as a three equation model we fit our model to data for 28 chinese provinces from 1970 to 1997 to determine whether national chinese agricultural supply is price and price risk responsive further we fit our model to data for north northeast south and southeast regions results from the three systems equations are compared to single equation estimations at the national level chinese agriculture is found to be price and price risk responsive the regional analyses suggest that significant regional differences exist unlike lin we do not find the household responsibility system hrs to be the dominant factor in increased yields in different regions of china

the dilemmas of market socialism capital market reform in china part i bonds this two part article analyses the attempts to reform the socialist financial system in china by diversifying financial assets and introducing capital markets the approach used is that of political economy in the sense of elucidating the interplay between political and economic interests actors and issues in the reform process part i discusses the issue of bonds by governments and enterprises although the reform era has seen gradual progress towards something resembling a bond market in terms of a diversification of bond types and growing competition between bond issues there is no evidence that this has improved allocative efficiency in the economy rather bonds have functioned as one instrument in a complex struggle for resources between political institutional and economic actors in the context of a continuing shortage economy this competitive system falls far short of a true market rather it embodies powerful systemic factors reflecting the basic structural and institutional features o

the tale of the tails canadian income inequality in the 1980s and 1990s we present new evidence on levels and trends in after tax income inequality in canada between 1980 and 2000 we argue that existing data sources may miss changes in the tails of the income distribution and that many of the changes in the income distribution have been in the tails for this reason we turn to an alternative source in particular we construct data on after tax and transfer income using census files augmented with predicted taxes based on information available from administrative tax data using these data we find that canadian after tax inequality levels are substantially higher than has been previously recognized primarily because income levels are lower at the bottom of the distribution than in commonly used survey data we also find larger long term increases in after tax income inequality and far more variability over the economic cycle this raises interesting questions about the role of the tax and transfer system in mitigating both trends and fluctuations in market income inequality les auteurs presentent de nouveaux resultats sur les niveaux et tendances de l inegalite des revenus apres impots au canada entre 1980 et 2000 on suggere que les donnees existantes peuvent avoir ignore des changements dans les extremites de cette distribution alors que le gros des changements y etait concentre pour cette raison les auteurs se sont tournes vers une autre source de donnees ils ont construit une base de donnees sur les revenus apres impots et les paiements de transfert en utilisant les donnees du recensement ainsi que des donnees additionnelles sur les impots prevus a partir de renseignements disponibles dans les dossiers administratifs on decouvre que les niveaux d inegalite des revenus apres impots sont beaucoup plus eleves que ce qu on a suggere jusqu ici d abord parce que les niveaux de revenus sont plus bas au pied de la distribution que ne le suggerent les donnees d enquetes on decouvre aussi un accroissement plus grand a long terme de l inegalite des revenus apres impots et une plus grande variabilite au cours du cycle economique voila qui souleve des questions interessantes a propos du role de la fiscalite et du systeme de paiements de transfert dans la modulation de la tendance et des fluctuations dans l inegalite des revenus du marche

rethinking inequality decomposition with evidence from rural china we examine inequality decompositions by income source and describe a general regression based approach for decomposing inequality the approach provides an efficient and flexible way to quantify the roles of variables like education and age in a multivariate context we illustrate the method using survey data from china the empirical results demonstrate how sharply different conclusions can emerge for different decomposition rules we explain how these differences reflect the treatment of equally distributed sources of income and we discuss implications for how results from inequality decomposition are interpreted a renewed interest in economic growth political economy and the distribution of income has again placed the economics of income inequality firmly on the academic research agenda relatively poor performances in latin america have been contrasted with success stories in east asia and recent evidence on the changing income distributions of emerging economic giants like china has

income inequality within and across counties in rural china 1988 and 1995 abstract using household data from samples covering 18 provinces in 1988 and 1995 income inequality within and between counties in rural china is assessed the approach enables us to aggregate average income and income inequality to the levels of provinces and the three regions comprising eastern central and western china most of income inequality in rural china in 1995 was found to be spatial and the uneven development of mean income across counties stood for most but not all of the rapid increase in income inequality mean income of the three regions diverged most forcefully

labor market participation of chinese agricultural households empirical evidence from zhejiang province abstract this work is devoted to the analysis of the different labor market participation regimes of chinese farm households over the reform process in the 1980s and 1990s using household data over the period 1986 2002 from the province zhejiang we apply a multinomial logit model to empirically examine household farm and regional characteristics affecting the probability that farmers participate in one of four alternative labor market regimes as generally accepted off farm participation is the dominant form of farm households labor market participation but rural households show additionally a significant impact on rural employment mainly linked with non agricultural household business results suggest that labor market decisions are significantly related to several family farm and village characteristics in particular we find education to be a key determinant of participation furthermore results point to a higher probability of female household members to take up off farm work

tax advice to developing countries an historical survey abstract the tax policy advice given to developing countries by foreign experts has been influenced by changing public finance doctrines development theory and policy and practices and debates in industrial countries current tendencies include less emphasis than formerly on taxation to mobilize savings in accordance with a national plan to reduce inequality and to influence resource allocation by special incentives governments are advised to avoid interfering with market directed allocations of resources high and progressive income tax rates high import duties and export taxes a value added tax is recommended for middle income countries

labor market adjustment in transition economies with on the job search this paper examines the impact of on the job search by workers in the state sector on the level and duration of unemployment in transition economies we derive the optimal speed of state sector closure when workers engage in on the job search 2000 elsevier science s a all rights reserved

china s uneven progress against poverty while the incidence of extreme poverty in china fell dramatically over 1980 2001 progress was uneven over time and across provinces rural areas accounted for the bulk of the gains to the poor though migration to urban areas helped the pattern of growth mattered rural economic growth was far more important to national poverty reduction than urban economic growth agriculture played a far more important role than the secondary or tertiary sources of gross domestic product gdp rising inequality within the rural sector greatly slowed poverty reduction provinces starting with relatively high inequality saw slower progress against poverty due both to lower growth and a lower growth elasticity of poverty reduction taxation of farmers and inflation hurt the poor external trade had little short term impact

national wage trends and migration in a chinese village economy a micro level modeling approach based on a composite utility function china s economy is experiencing a regime shift away from a fully elastic supply of labor from a large pool of rural surplus labor and toward a situation of increasing labor scarcity and rising wage rates moreover faster wage increases in the regions of origin of many rural urban migrants are likely to affect the dynamics of inter regional migration these wage trends have implications at the local level in particular in a setting in which migration connects rural communities to the national labor market and in which migration is of high importance for the livelihoods of rural households taking a village perspective this article develops a village computable general equilibrium model to study local impacts of current wage trends in china as a central piece of the model the role of access to migration for household livelihoods is recognized access to migration is linked to household demographics and included in the model through a composite utility function that captures household preferences and disutilities associated with alternative off farm activities simulation results illustrate how households utility considerations affect migration responses to national wage changes statements about possible impacts on village level labor supply land use and agricultural production are made when migration wages and local off farm wages are simulated to increase an overall increase in household and village migration and a higher supply of labor to local off farm labor markets is accompanied by a contraction of farm production although land is reallocated between households with different migration responses total agricultural output declines

rural urban disparity and sectoral labour allocation in china this study examines china s rural urban segmentation and its causes in the context of economic reforms household survey and aggregate data indicate a v shaped process in which rural urban consumption and income differentials decreased between 1978 and 1985 but then have continually increased to historically high levels this sectoral division is consistent with production function estimates based on provincial data that reveal higher labour productivity in urban state owned industries than in rural industries and agriculture to explain the v shaped change we argue that the precedent of successful rural reforms raised farmers relative earnings but the remaining obstacles to an efficient sectoral allocation of labour have prevented china from eliminating dualism recent financial policies consisting of urban price subsidies and increased investment credits have also had influential distribution effects that are biased against the rural sector

precautionary behavior migrant networks and household consumption decisions an empirical analysis using household panel data from rural china abstract we develop a test of precautionary behavior in the consumption decisions of rural agricultural households among surveyed households facing a median level of consumption risk 10 of savings can be attributed to a precautionary motive and this increases to 15 for households with consumption per capita below the poverty line we next use distant lags of local rainfall shocks uncorrelated with current consumption growth to identify the size of migrant networks outside the village and then present evidence that both poor and nonpoor households engage in less precautionary saving as the size of the village migrant network increases

a model of competition between unemployed and employed job searchers an application to the unemployment outflow rate in britain this paper proposes a model to explain the allocation of new jobs to workers the central innovation is the analysis of the competition for jobs between employed and unemployed job searchers it is argued that the endogeneity of the fraction of the employed engaging in search is a crucial determinant of the unemployment outflow rate the model is applied to the unemployment outflow rate in britain the model fits the data well and encompasses its main rival copyright 1993 by royal economic society

the evolution of income inequality in rural china abstract in this article we analyze trends in income inequality and the distribution of income in rural china from 1987 to 1999 we find an uneven but long run increase in inequality in rural china and show that nearly half of the rural population was not much better off in 1999 than at the start of the period we rule out geography as the most important factor for explaining income differences and the increases that occurred over time much more important were growing differences between households living in the same village province or region we also find that access to nonagricultural incomes from local wage employment and family businesses contributes to inequality but that employment outside the county in which a household lives and accessed through temporary migration is relatively equalizing finally we document important strengths and weaknesses of the primary data set used for our analyses relative to other data sources available for study of inequality and poverty in rural china

dual income taxation a promising path to tax reform for developing countries summary the dual income tax combines a progressive tax on labor income and a lower flat tax on income from capital unlike flat tax systems a dual income tax provides developing countries greater flexibility in addressing tax competition while retaining progressivity countries could use the move to a dual income tax system not just as an opportunity to rationalize the taxation of income from business operations and investment but also as a vehicle for broader reform of their tax systems

measuring poverty in a growing world or measuring growth in a poor world the extent to which growth reduces global poverty has been disputed for 30 years although there are better data than ever before controversies are not resolved a major problem is that consumption measured from household surveys which is used to measure poverty grows less rapidly than consumption measured in national accounts in the world as a whole and in large countries particularly india china and the united states in consequence measured poverty has fallen less rapidly than appears warranted by measured growth in poor countries one plausible cause is that richer households are less likely to participate in surveys but growth in the national accounts is also upward biased and consumption in the national accounts contains large and rapidly growing items that are not consumed by the poor and not included in surveys so it is possible for consumption of the poor to grow less rapidly than national consumption without any increase in measured inequality current statistical procedures in poor

stagflationary effect of government bond financing in the transforming chinese economy a general equilibrium analysis abstract this paper studies how the method of government debt financing affects the macroeconomic performance of the transforming chinese economy the investigation is conducted within the context of an endogenous growth model that incorporates the major institutional features of the chinese economy using this framework we evaluate the effects on the growth rate of output and inflation if the chinese government relies more on bonds and less on money creation for budget deficit and debt repayment financing it is shown that although this policy change can reduce the growth rate of the money supply it can generate a stagflationary effect reducing the rate of output growth while raising the rate of inflation if the initial fraction of government deficit and debt repayment financed by bonds is sufficiently small and the tax rate on labor income is sufficiently low

taxation in papua new guinea backwards to the future abstract this paper explores the evolution current problems and possible future developments of the tax system of papua new guinea leaving aside the important question of natural resource taxation the paper concludes that there is at present a serious mismatch between the nature of papua new guinea s economy and its taxes in particular taxation must be extended to reach the bulk of economic activity in the country no matter what is done in this respect however papua new guinea is most unlikely to be able to finance its current level of government expenditure in the absence of additional aid or natural resource revenue the major public sector problem confronting the country is therefore not tax reform but expenditure reform

ranking income distributions a large variety of policy questions involve choices between social states and a consequent ordering of the feasible alternatives when these social states are related to the levels of welfare experienced by individuals or households two central issues stand out in determining the relative desirability of different social outcomes one of these is the essentially positive exercise of achieving comparability between households with different characteristics such as composition or preferences operating in different environments for example facing different price structures the other concerns the normative judgments implicit in the evaluation of alternative allocations of resourcesthe emphasis placed on inequality between households and the extent to which greater inequality can be compensated by higher average living standards this paper focuses on the second of these issues and in doing so we abstract from the problem of household comparability by considering a population of n households identical in all respects except for their incomes the question of ordering social states then becomes one of ranking income distributions over a group of anonymous households or individuals borrowing the usual assumptions imposed on consumer preferences we may suppose that a social ordering of income distributions can be represented by a welfare function 2

the impact of income components on the distribution of family incomes attempts have recently been made to assign inequality contributions to various components of income this paper discusses the issues involved in such assignments and highlights the problems that follow from having a number of possible decomposition rules u s data on the distribution of family incomes are used to examine the relative influence of these income components and to evaluate empirically the performance of different decomposition rules a wide range of inequality contributions can be obtained even when restricted to only naturally derived decomposition rules some of the results are plainly absurd and serve to warn against the indiscriminate use of decomposition formulae without first investigating their properties

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

property rights labour markets and efficiency in a transition economy the case of rural china we investigate the consequences of imperfect factor market development for farm efficiency in north china we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative as opposed to market allocation of land combined with unevenly developed off farm opportunities using a new household survey we find considerable inefficiency in the use of labour this inefficiency is alleviated by external labour markets and to a limited degree by administrative reallocations the reallocations do not go far enough however which raises important questions about con straints on rental activity and property rights formation more generally jel classification q15 012

looking beyond averages in the trade and poverty debate there has been much debate about how much poor people in developing countries gain from trade openness as one aspect of globalization the paper views the issue through both macro and micro empirical lenses the macro lens uses cross country comparisons and aggregate time series data the micro lens uses household level data combined with structural modeling of the impacts of specific trade reforms case studies are presented for china and morocco both the macro and micro approaches cast doubt on some widely heard generalizations from both sides of the globalization debate additionally the micro lens indicates considerable heterogeneity in the welfare impacts of trade openness with both gainers and losers among the poor a number of covariates of the individual gains are identified the results point to the importance of combining trade reforms with well designed social protection policies

reranking and pro poor growth decompositions for china and vietnam abstract reranking in the move from one income distribution to another makes it impossible to infer from changes in lorenz and generalised lorenz curves how income growth among those toward the bottom of the initial income distribution compares to that among those toward the top and whether there has been income growth among those who were initially poor decompositions allowing for reranking indicate that economic growth in china and vietnam has been better for households who were initially poor than changes in the lorenz and generalised lorenz curve and poverty growth curve would suggest

how serious is the neglect of intrahousehold inequality in this report the authors develop a framework for assessing the consequences of ignoring intrahousehold inequality in the measurement and analysis of poverty and inequality they apply this framework to data for the philippines and conclude that 1 the result of neglecting intrahousehold inequality will probably be considerable understatement of the levels of poverty and inequality with the philippine data measured levels of inequality and poverty were off 30 percent as a result of ignoring intrahousehold variation and 2 patterns of inequality revealed by household level data are somewhat different from patterns revealed by individual level data but the differences seem not to be dramatic to confirm these results the exercise should be repeated with data from other countries

unemployment labour markets and structural change in eastern europe labour markets in eastern europe michael burda unemployment is a major concern in the transforming economies of central and eastern europe the modern flow approach to labour markets suggests both that unemployment is an important component of the transformation process and that the labour market institutions adopted will influence the rate of unemployment in the long run to date eastern european countries exhibit considerable divergences in several of these institutions especially in unemployment benefit systems collective bargaining structures and active labour market policies an aggregate matching function is successfully estimated for data from czech and slovak employment offices emerging labour markets in the east function not so differently from those in the west the implied dynamics make both big bang and benign neglect unattractive strategies for transformation a mixed bang is more appropriate quantitative evidence about the effects on unemployment of different labour market institutions in oecd countries is used to make long term projections of equilibrium rates of unemployment in central and eastern europe given the labour market institutions now in place there with the possible exception of the czech republic high unemployment is likely to be pervasive and persistent

income distribution in urban china during the period of economic reform and globalization this paper addresses three issues that are central to understanding the effects of the transition in china from central planning to a more market oriented economic system first what have been the consequences of the economic reforms for the distribution of income in urban areas second what has happened to the incidence of urban poverty third have government policies helped to diminish or accentuate urban poverty and inequality answers to these questions are based on a comparison of two national sample surveys conducted in 1988 and 1995

inequality and conservation on the local commons a theoretical exercise to analyse the effect of asset inequality on co operation within a group we consider a twoplayer nonco operative model of conservation of a common pool resource overexploitation by one user affects another s payoff by reducing the next period catch we give necessary and sufficient conditions such that conservation is a nash equilibrium and show that increasing inequality does not in general favour full conservation however once inequality is sufficiently great further inequality can raise efficiency thus the relationship between inequality and economic efficiency is u shaped finally we analyse the implications for conservation if players have earning opportunities outside the commons the daily livelihood of vast masses of the rural poor in many countries depends on the success with which common pool resources cprs such as forest resources grazing lands in shore fisheries and irrigation water are managed and on the environmental consequences of their management understanding the factors that lead to success or failure of community management of these resources is thus critical to rural development cpr management is a collective action dilemma a situation in which mutual cooperation is collectively rational for the group as a whole but individual cooperation is not necessarily individually rational for each member one factor that has not always been recognised as critical to the outcome of collective action dilemmas is heterogeneity among the resource users in this paper our attention will be largely restricted to a single but potent kind of heterogeneity inequality in asset ownership olson 1965 hypothesised that inequality might favour the provision of a public good

rising regional inequality in china fact or artifact summary china s local populations can be counted in two ways people with hukou household registration from each place and people actually residing in each place for most of the first three decades of the reform era the hukou count denominated per capita gdp figures output and living standards were overstated in coastal provinces and understated in the interior the distortion grew bigger as the non hukou migrants increased to over 100 million much of the apparent increase in inter provincial inequality is a statistical artifact caused by this distortion the recent switch to using the resident count to denominate gdp introduced new distortions

markets and inequality in rural china parallels with the past after 30 years of egalitarian rhetoric and collectivist practice the introduction of market reforms to rural china entailed obvious risks for policymakers increases in average income might not compensate for the inequality generated by market based income determination concern for this possibility may help explain the slow relaxation of administrative control over the allocation of resources like land in order to evaluate the effect of market reforms we could begin by comparing the current gini coefficient to that which prevailed during the collective era see louis putterman 1993 for early evidence yet this might tell us little about the specific impact of market organization on income determination government policies such as collective land ownership mobility restrictions and fertility limits cloud the picture furthermore industrialization though itself a product of the reforms has changed the basis upon which individuals earn income isolating a pure effect of market organization is a difficult but important task since many current chinese policies reflect an ambivalent attitude toward decentralized market based resource allocation we offer a few suggestions on issues that need to be considered as this evaluation proceeds by exploring current inequality in rural northeast china from the vantage point of the 1930 s we begin with the observation that the level of inequality is similar in 1995 and 1935 and moreover that most contemporary inequality exists within villages as was the case in the 1930 s we then focus on two institu

the decomposition of disturbances to national output of china the evidence of sectoral and regional shocks the chinese government has established policies to promote its industrial sectors and to develop coastal provinces since the late 1978 to investigate the extent and reason the output growth in china has been influenced by these policies an error component model is employed to decompose the importance of sectoral and regional shocks to variations in national output the results show that both sectoral specific shocks common across regions and regional specific shocks common across sectors are important in explaining the disturbance of national output in china specifically sectoral specific shocks consistently explain relatively more disturbance of chinese output than regional specific shocks do our empirical results are somewhat different from stockman 1988 and costello 1993 since they show almost equal explanatory power of sectoral and national shocks in accounting for national outputs in oecd countries

sources of output change in china 1987 1997 application of a structural decomposition analysis since the beginning of the economic reforms implemented in the industrial sectors of china the economy has grown and changed rapidly the high gdp growth rates recorded since 1985 have stimulated unprecedented changes in the economic structure of this developing economy the major causes of the changes are the increase in consumption and investment production technological change and trade the objective was to analyse this type of structural change and to explore the sources of economic growth during the period 1987 1997 by using the method of structural decomposition analysis sda the chosen sda method based on the comparison between two input output tables allowed us to decompose each sector s and industry s output growth it enabled the relative impact of final demand and technological change of each industry on overall growthto be measured

asset based poverty transition and persistence in rural china this article tests empirically for transition and persistence of poverty in rural china based on the theory of asset based poverty traps it proposes an analytical framework mitigating the problem of endogenous switching between accumulation regimes and disentangling the true state dependence of poverty specifically a dynamic asset threshold separating households into downward and upward mobility regimes is identified after taking households unobserved characteristics and observed regime differentiated accumulation strategies into account the static analysis identifies causality running from settling into a downward mobility regime to the probability of poverty measured by consumption furthermore allowing for endogenous initial poverty status the dynamic analysis finds strong true state dependence in poverty households with the same characteristics are nearly twice as likely to be poor as if they had not previously switched to the accumulation regime assets below the dynamic threshold serve as a conduit through which poverty propagates itself factors that help to break this vicious circle are identified

impacts of migration on household production choices evidence from china abstractthe great migration from chinese farms to cities during the past several decades ranks among the most economically consequential of modern population movements we use a national sample of rice producing chinese households to examine the effects of that migration on agricultural production our assessment involves evaluating four alternative theories of labour market equilibrium in the framework of an expanded agricultural household model migration s farm production impacts appear to be slight not on account of farm labour market perfections or remittance financed technological improvements but by substituting a reduction in leisure and other low return activities for lost labour

village political economy land tenure insecurity and the rural to urban migration decision evidence from china this paper investigates the impact of land tenure insecurity on the migration decisions of china s rural residents a simple model first frames the relationship among these variables and the probability that a reallocation of land will occur in the following year after first demonstrating that a village leader s support for administrative land reallocation carries with it the risk of losing a future election the paper exploits election timing and village heterogeneity in lineage group composition and demographic change to identify the effect of land security in response to an expected land reallocation in the following year the probability that a rural resident migrates out of the county declines by 2 8 percentage points which accounts for 17 5 percent of the annual share of village residents aged 16 to 50 who worked as migrants during the period this finding underscores the potential importance of secure property rights for facilitating labor market integration and the movement of labor out of agriculture

urban income inequality in china revisited 1988 2002 abstract using newly available spatial price deflators this paper shows that inequality evaluations in the literature overstate the magnitude of inequality and inequality changes in china as well as the role played by regional differences in the recent inequality rise

geographic poverty traps a micro model of consumption growth in rural china how important are neighbourhood endowments of physical and human capital in explaining diverging fortunes over time for otherwise identical households in a developing rural economy to answer this question we develop an estimable micro model of consumption growth allowing for constraints on factor mobility and externalities whereby geographic capital can influence the productivity of a household s own capital our statistical test has considerable power in detecting geographic effects given that we control for latent heterogeneity in measured consumption growth rates at the micro level we find robust evidence of geographic poverty traps in farm household panel data from post reform rural china our results strengthen the equity and efficiency case for public investment in lagging poor areas in this setting copyright 2002 john wiley sons ltd

on the measurement of poverty official statistics in the united states and the united kingdom show a rise in poverty between the 1970 s and the 1980 s but scepticism has been expressed with regard to these findings in particular the methods employed in the measurement of poverty have been the subject of criticism this paper re examines three basic issues in measuring poverty the choice of the poverty line the index of poverty and the relation between poverty and inequality one general theme running through the paper is that there is a diversity of judgments which enter the measurement of poverty and that it is necessary to recognize these explicitly in the procedures adopted there is likely to be disagreement about the choice of poverty line affecting both its level and its structure in this situation we may only be able to make comparisons and not to measure differences and the comparisons may lead only to a partial rather than a complete ordering the first section of the paper discusses the stochastic dominance conditions which allow such comparisons illustrating their application by reference to data for the united states the choice of poverty measure has been the subject of an extensive literature and a variety of measures have been proposed in the second section of the paper a different approach is suggested considering a class of measures satisfying certain general properties and seeking conditions under which all members of the class which includes many of those proposed give the same ranking those sceptical about measures of poverty often assert that poverty and inequality are being confounded the third section of the paper distinguishes four different viewpoints and relates them to theories of justice and views of social welfare

a multivariate analysis of the distribution of individual s welfare in china what is the role of health many economists have argued that income is an inadequate indicator of welfare in this paper we conduct a multivariate analysis of the distribution of individual welfare in china at three selected time points 1991 1997 and 2006 instead of using income as the only welfare indicator as in most distributional analyses we explicitly consider the role of health in welfare distribution we adopt the naga and geoffard 2006 decomposition method by which we can decompose a bidimensional welfare inequality index into two univariate atkinson kolm sen indices that measure the inequalities in health and income and a third term that measures the contribution from the joint distribution of the two attributes to total inequality we show that the third term might be used as an alternative to the concentration index to measure the income related inequality in health