Research On The Chinese Residents’ Preference For Redistribution And It’s Influence Mechanism

Confronting with the large income gap and the serious problem of unfair distribution, the Chinese residents have showed general dissatisfaction with the redistribution, and the strong preference for redistribution is an important embodiment. Focusing on the influence mechanism of preference for redistribution, the scholars abroad have carried out a lot of theoretical and empirical research. But related research is very limited in China. Therefore, basing on the facts of the status about Chinese residents’preference for redistribution, this dissertation has studied the Chinese residents’preference for redistribution and its influence mechanism systematically, so as to make the related research supplement and perfect. Besides, it is also expected to provide some micro level empirical evidence for China’s new round reform of income distribution system.Basing on the literature review and analysis of the facts of the status about Chinese residents’preference for redistribution, this dissertation studies the main influence factors of Chinese residents’ preference for redistribution from economic interest level, fair cognition level and macro level respectively. Firstly, from the perspective of income inequality, the dissertation focuses on the effect of subjective income inequality on Chinese residents’ preference for redistribution. By decomposing the subjective income inequality into reasonable and unreasonable inequality, it is found that the reasonable, fair inequality does not enhance the preference for redistribution, but weakens it, which means that the reasonable inequality can improve the recognition degree of the income distribution. At the same time, the results also show that when confronting with unreasonable and unfair income inequality, the residents will show strong preference for redistribution, which means that they are less agree with the condition of income distribution. Therefore, since the reform and opening up, the Chinese residents have abandoned egalitarianism and endured with a reasonable income inequality, however, when confronting with unreasonable and unfair income inequality, the residents show strong dissatisfaction, which is manifested by strong preference for redistribution.Secondly, by constructing a more accurate liquidity index, the dissertation studies the effect of income and liquidity on Chinese residents’preference for redistribution. The results show that those who have experienced downward mobility have stronger preference for redistribution. In addition, those who have prospect of upward have weaker preference for redistribution. The marginal effect estimate indicates that social mobility has much bigger influence on preference for redistribution, wich is bigger than the level of income. Besides, the dissertation verifies the existence of "POUM" hypothesis in China directly by introducing the interaction term of the income variable and liquidity variable. The results show that the effect of income on preference for redistribution is affected by liquidity. In other words, the high income residents with downward liquidity show stronger preference for redistribution. Accordingly, the low income residents with upward liquidity show weaker preference for redistribution.Thirdly, the dissertation studies the effect of fair cognition on preference for redistribution empirically from the perspectives of social fairness and tax equity respectively. The results indicate that the social fairness has a significant effect on preference for redistribution, those who think that success depends on the uncontrollable factors have stronger preference for redistribution, and those who think that success depends on the controllable factors have weaker preference for redistribution. At the same time, it is also found that perception of tax equity variables is statistically significant at the1%level, which means as compared with other residents, who believes that the tax burden is inequity will shows stronger preference for redistribution.Finally, the dissertation takes tax structure as an example to test the effect of macro variable on preference for redistribution. The theory analysis indicates that tax structure can affect the resident’s preference for redistribution by affecting tax price. The empirical results show that tax structure and preference for redistribution are significantly correlated, the higher the proportion of the indirect tax is in one city, the stronger the preference for redistribution of residents is. Further marginal effect estimation shows that the marginal impact of the tax structure on the preference for redistribution of residents is roughly the same as per capita GDP, but is significantly greater than the individual income.