On Income Disparity Between Urban And Rural Residents In China

Income disparity between urban and rural residents is a big issue affecting China's economic development and social stability, and thus a hot concern of many scholars. It is of practical importance and academic value to study such income gap in China and this paper is furthering such studies which have been conducted by others.This paper mainly analyzes the income gap between urban and rural residents by using descriptive statistics, regression model and Correlation analysis. By observing the changes of income d disparity between city and countryside from the post-reform period of 1978-2005 with the method of descriptive statistics, it is concluded that such income disparity is different in different phases of the reform process of China, as witnessed by a cycle of"narrowing-widening-narrowing-widening-stabilizing gradually. Such income gap is a result of not only low productivity in agriculture, but also the nation's political and economic system and governmental policies. With the regression model to look at elements affecting such income gap, it comes out that the ratio of agriculture to the whole GDP, agricultural expenditure out of the total budget, the ratio of rural residents to the total population and the ratio of agricultural taxation to the total national revenue as well as agricultural infrastructure expenditure are important factors in producing such discrepancy. This conclusion is reached undoubtedly under the influence of limited statistics. This paper focuses on the comparative analysis of such income gap between different provinces with the method of correlation analysis. Studies show that out of the 31 provinces in China, 28(90.32%) have the related coefficient of no less than 0.7(the number for Shanghai is about 0.7), which means such income gap changes in most provinces go in line with the national picture. So the conclusion made by using national statistics in the studies of changes of income gap between urban and rural people are applicable nationwide. At the same time, the reasons for such income differences and solutions for it are similar and thus the policies adopted by the central government to narrow such gap are generally applicable nationwide.