China Is Poorer Than We Thought, But No Less Successful in the Fight Against Poverty

By Shaohua Chen, M. Ravallion. 2008

184 citations recorded by the source corpus.

In 2005, China participated for the first time in the International Comparison Program (ICP), which collects primary data across countries on the prices for an internationally comparable list of goods and services. This paper examines the implications of the new Purchasing Power Parity (PPP) rate (derived by the ICP) for China's poverty rate (by international standards) and how it has changed over time. We provide estimates with and without adjustment for a likely sampling bias in the ICP data. Using an international poverty line of USD 1.25 at 2005 PPP, we find a substantially higher poverty rate for China than past estimates, with about 15% of the population living in consumption poverty, implying about 130 million more poor by this standard. The income poverty rate in 2005 is 10%, implying about 65 million more people living in poverty. However, the new ICP data suggest an even larger reduction in the number of poor since 1981.

Subfields: Economics and Econometrics, Political Science and International Relations, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/65abbc92e8e7016b8adca678fb1549a8df453a63

Citations in the corpus

• The Global Distribution of Income (2014, unknown): “This is because the price surveys in China in 2005 were restricted to 11 metropolitan areas, which did not include any rural areas (Chen and Ravallion, 2010).”
• A global count of the extreme poor in 2012: data issues, methodology and initial results (2015, unknown): “For estimates based on the 2005 PPPs, adjustments to the PPPs for India and China were also motivated by a concern that the 2005 ICP price collection was heavily concentrated in urban areas and that the national PPPs therefore possibly had an urban bias (Ravallion and Chen, 2010; Chen and Ravallion,”
• Recent trends in inequality and poverty in developing countries (2013, unknown): “The measurement of relative, instead of absolute, poverty, can be justified on two grounds (Sen, 1983; Chen and Ravallion, 2008).”
• Poverty Effects of Higher Food Prices: A Global Perspective (2009, unknown): “…aggregates are expressed in 2005 PPP and the newly developed $1.25 and $2.5 poverty lines are used to measure the initial poverty indices (see Chen and Ravallion, 2008), and (iv) Ivanic and Martin (2008) total poverty estimates are valid for low-income countries covering a total population…”
• The developing world is poorer than we thought, but no less successful in the fight against poverty (2008, unknown): “17 Although the survey included some surrounding rural areas, it cannot be considered representative of rural China; evidence on this point is provided by Chen and Ravallion (2008a).”
• Global inequality recalculated and updated: the effect of new PPP estimates on global inequality and 2005 estimates (2012, unknown): “This is not a new approach and it has been already used for China by Ravallion and Chen [31] in their global poverty work as well as by Milanovic in global inequality calculations ([23], p. 61; [24], Chapter 9).”
• Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context (2015, unknown): “For a detailed discussion of this new, improved World Bank data, see Chen & Ravallion (2008).”