Income Distribution and Poverty in Rural China

This chapter investigates the extent and nature of poverty in rural China, using survey data from our household income survey of 1988. The first section contains some historical background and introduces the data set. Next we discuss the conception and measurement of poverty, derive a direct nutrition-based and an income-based poverty line, and present alternative headcounts of rural poverty. The major characteristics of poor households are discussed in the third section. The fourth section presents and estimates a model of per capita income distribution. Based on this model, some simple simulation exercises are carried out in the fifth section to illustrate the effects of changes in the independent variables on the incidence and intensity of rural poverty and derive suggestions for policy. Our major conclusions are presented in the final section.