Income and Consumption Inequality in Urban China: 1992-2003

A study was conducted to examine the changes in income and consumption inequality in China's urban population during the period 1992-2003 by using a data-set compiled from the Urban Household Income and Expenditure Survey (UHIES) by the National Bureau of Statistics (NBS) of China. Besides using a nationally representative data set, our study contributes to the existing scholarship on China's urban inequality by considering the evolution of between-group inequality and within-group inequality. The UHIES is a population-representative sample that is based on several stratifications at the provincial, county, city, town, and neighborhood community levels. Contingency planning for things like illness and loss of employment are important for Chinese families because of the lack of social security and support systems. China has undergone many structural changes that have substantially affected income distribution in urban areas. The Chinese people tend to rely on their savings to cover future negative shocks.