Spatial price differences and inequality in China: Housing market evidence

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dc.contributor.authorGibson, John
dc.contributor.authorLi, Chao
dc.date.accessioned2013-06-03T22:11:14Z
dc.date.available2013-06-03T22:11:14Z
dc.date.issued2013-03
dc.description.abstractThe large literature on regional inequality in China is hampered by incomplete evidence on price dispersion across space, making it hard to distinguish real and nominal inequality. The two main methods used to calculate spatial deflators have been to price a national basket of goods and services across China’s different regions or else to estimate a food Engel curve and define the deflator as that needed for nominally similar households to have the same food budget shares in all regions. Neither approach is convincing with the data available in China. Moreover, a focus on tradable goods like food may be misplaced because of the emerging literature on the rapid convergence of traded goods prices within China that contrasts with earlier claims of fragmented internal markets. In a setting where traded goods prices converge rapidly, the main source of price dispersion across space should come from non-traded items, and especially from housing given the fixity of land. In this paper we use newly available data on dwelling sales in urban China to develop spatially-disaggregated indices of house prices, which are then used as spatial deflators for both provinces and core urban districts. These new deflators complement existing approaches that have relied more on traded goods prices, and are used to re-examine the evidence on the level of regional inequality. Around one-quarter of the apparent spatial inequality disappears once account is taken of cost-of-living differences.en_NZ
dc.format.mimetypeapplication/pdf
dc.identifier.citationGibson, J. & Li, C. (2013). Spatial price differences and inequality in China: Housing market evidence. (Department of Economics Working Paper Series, Number 06/13). Hamilton, New Zealand: University of Waikato.en_NZ
dc.identifier.urihttps://hdl.handle.net/10289/7670
dc.language.isoenen_NZ
dc.publisherUniversity of Waikatoen_NZ
dc.relation.ispartofseriesDepartment of Economics Working Paper Seriesen_NZ
dc.rights©2013 The Authorsen_NZ
dc.subjecthousingen_NZ
dc.subjectinequalityen_NZ
dc.subjectpricesen_NZ
dc.subjectspatialen_NZ
dc.subjectChinaen_NZ
dc.titleSpatial price differences and inequality in China: Housing market evidenceen_NZ
dc.typeWorking Paperen_NZ
pubs.elements-id54602
uow.relation.series06/13en_NZ
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