Abstract
It has been intensely debated about estimation of urban-rural income gap in China in recent years. One argument is that the gap is overestimated because the regional differences in living costs are not taken into account. The opposite opinion argues for underestimation of the income gap, claiming that the gap would be even larger if the disguised subsidies would be considered. The paper attempts to re-estimate the urban-rural income gap and national inequality in China by considering both disguised subsidies (such as public housing, social insurances) and regional living costs.
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