Can We Predict Vulnerability to Poverty?

There are alternative definitions of vulnerability to poverty. Most researchers prefer to define vulnerability as the probability of a household or individual falling into poverty in the future. Based on this definition and using household survey panel data from rural China, this paper attempt to assess the extent to which we can measure vulnerability to poverty. The assessment is based on comparisons between predicted vulnerability and actually observed poverty. We find that the precision of prediction, first, varies depending on the vulnerability line; our results suggest setting the line at 50 per cent in order to improve predictive power. Second, precision depends on how permanent income is estimated. Assuming log-normal distribution of income, it is preferable to use past weighted average income as an estimate of permanent income rather than using regressions to gage permanent income. And third, prediction precision depends on the chosen poverty line. More accurate measurement of vulnerability to poverty is obtained with a higher poverty line of US$2 instead of US$1.vulnerability, poverty, permanent income, transitory income

Poverty Reduction in China: Trends and Causes

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.poverty, Shapley decomposition, unit-record data, China

Output and Price Fluctuations in China's Reform Years: What Role did Money Play?

money, output fluctuation, price fluctuation, structural VEC model, China

Why Do Poverty Rates Differ From Region to Region? The Case of Urban China

poverty, Shapley decomposition, China

Globalization and the Urban Poor in China

globalization, poverty, China

Poverty, Pro-Poor Growth and Mobility: A Decomposition Framework with Application to China

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 growth-distribution decomposition in providing insights into poverty dynamics.poverty decomposition, Sen index, longitudinal data, China

What Accounts for China's Trade Balance Dynamics?

China, trade balance, real exchange rate, structural VAR, Law of One Price