Poverty and Subjective Poverty in Rural China

Hanjie Wang,Qiran Zhao,Yunli Bai,Xiaohua Yu,Linxiu Zhang

doi:10.1007/s11205-020-02303-0

Abstract

China is undergoing a campaign which is called “The Targeted Poverty Alleviation Policy” to eradicate extreme poverty from rural China until 2020. Though poverty in rural China has been studied intensively in different objective dimensions, little attention has been paid to poverty line settings and subjective poverty, which are hinged to the policy effects. In order to fill in the research gap, this study employs a nationally representative survey of rural households in 2016, to measure subjective poverty in rural China, and analyze the determinants as well. Our results indicate that the mean subjective poverty line of the rural households is 8297 yuan per capita, which is far higher than the national poverty line (2800 yuan). Statistically, 29% of the surveyed rural households who are not objectively poor feel subjectively poor. The objective poverty line cannot fully reflect the subjective poverty perception. Thus, how to reduce the subjective poverty perception could be a major policy agenda in rural China after 2020, when extreme poverty is no longer a problem.

Highlights

Poverty is globally regarded as a serious challenge, and poverty reduction is put in a prior position in the policy agenda of many developing countries
The poverty line is set by some experts which do not capture full information of the poor; Second, the prices collected by the International Comparison Program (ICP) are national average prices, which are different from those the poor face, as the expenditure patterns of the poor often differ the aggregate patterns; Third, each country has different consumption patterns due to different food, culture, and traditions (Deaton 2010; Deaton and Dupriez 2011; Kim et al 2018)
When the age of a household head increases by one year, the subjective poverty line decreases by 0.7%

Summary

Introduction

Poverty is globally regarded as a serious challenge, and poverty reduction is put in a prior position in the policy agenda of many developing countries. The most recent global poverty line recommended by the World Bank is US $ 1.90 expenditure per day per person (2011 purchasing power parity (PPP) price). Through the purchasing power parity (PPP), the global poverty line can be compared between different countries. The poverty line is set by some experts which do not capture full information of the poor; Second, the prices collected by the International Comparison Program (ICP) are national average prices, which are different from those the poor face, as the expenditure patterns of the poor often differ the aggregate patterns; Third, each country (region) has different consumption patterns due to different food, culture, and traditions (Deaton 2010; Deaton and Dupriez 2011; Kim et al 2018)

Objectives

Methods

Results

Conclusion