Consumption Based Estimates of Urban Chinese Growth

By Marcos d Chamon, Irineu E de Carvalho Filho

December 23, 2013

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Marcos d Chamon, and Irineu E de Carvalho Filho. Consumption Based Estimates of Urban Chinese Growth, (USA: International Monetary Fund, 2013) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper estimates the household income growth rates implied by food demand in a sample of urban Chinese households in 1993–2005. Our estimates, based on Engel curves for food consumption, indicate an average per capita income growth of 6.8 percent per year in 1993–2005. This figure is slightly larger than the 5.9 percent per year obtained by deflating nominal incomes by the CPI. We attribute this discrepancy to a small bias in the CPI, which is of a similar magnitude to the one often associated with the CPI in the United States. Our estimates indicate stronger gains among poorer households, suggesting that urban inflation up to 2005 in China was “pro-poor,” in the sense that the increase in the cost of living for poorer households was smaller than for the average one.

Subject: Consumer price indexes, Consumption, Expenditure, Income, National accounts, Prices, Public expenditure review

Keywords: Bias estimate, Consumer price indexes, Consumption, Consumption expenditure, Cost of living, CPI Bias, Household consumption, Income, Income growth, Income variable, Measurement error, Price deflator, Public expenditure review, Survey cross-sections, WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/265
Stock No:

WPIEA2013265
ISBN:

9781484329672
ISSN:

1018-5941

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