Gray Income in China Is Seriously Underestimated: A Response to Luo Chuliang, Yue Ximing and Li Shi

Wang Xiaolu
National Economic Research Institute, China Reform Foundation, Beijing

 
Abstract: This paper responds to criticisms levied at my previous research paper on “gray” household income in China. In 2010, I published a paper estimating the actual income of high-income urban residents in China. Results indicated that per-capita disposable income for the wealthiest 10 percent of households in 2008 was roughly 139,000 yuan, rather than the 44,000 yuan indicated by official statistics. This suggested an aggregate gray income of 9.3 trillion yuan for China’s urban residents in 2008, mainly dispersed among high income groups. In 2012, Luo Chuliang et al. published a criticism paper, arguing that flawed methodology and analysis exaggerated gray income and household income gaps. This paper both responds to these criticisms and reasserts my original claim that official statistics seriously underestimate both gray income and income inequality in China.
Key words: gray income

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