The Measurement Of Regional Income Inequality In China And Accounting For The Influence Factors

Income inequality has become a public topic concerned by the community in China.And regional income inequality is one of the focal points. Regional income inequality willplagues China in a long which has attracted the attention of state and government. It is alsothe important issue focused on by many researcher. There have been many academicstudies of regional income disparity. With different research perspectives and methods,there is a certanin difference in these research conclusions. But almost all studies obtainesthat the income inequality in China has been very obvious. Absorbing, referencing to andextending previous studies, this thesis researches the income levels and their inequalitiesbetween regions in China. It will starting from the provincial unit and combines theclassification and merger of urban and rural. It also contrast the "Four areas" and "Eighteconomic zones" integrated using data of the regional per capita GDP and regional residentper capita income. Firstly, we will measure the regional income inequaliy. The keymethods of calculating the metrics of income inequality such as Max-Min,Max/Min,variation coefficient and so on will be used. We also calculate the Gini coefficient andTheil-L index systematically. The most important content of this part is the regionnalsubgroup decomposition of Theil-L index by Four areas, Eight economic zones and evenurban-rural. This work mainly follows the principle of "the total regional income inequalityis formed by the inequality within regions and between regions". Secondly, This articleanalyzes the causes and influence factors of regional income inequality combining China’sactual development. Based on this, the income decision models will be build. Further more,the last empirical work is to decompose the percentaged impact contribution of each factorusing frontal regression equations.By a wide range of conducting the measurements and analysises about the regionalincome inequality in China, this thesis forms a systematic recongnition of the currentsituations, trends, structural characteristics and influence factors of regional incomeinequality in China. There are several foremost conclusions as the following. First, thechanges of regional income disparity in China has a significant feature of period andregional structural features. Second, the general characteristics of regional incomeinequality reflected by the measure result of urban and rural residents income have somedifference compared to the measure result of per capita GDP. Juxtaposing the measure result of current prices data and constant prices data, we also find significant differences inthe changes of regional income disparity in China. Third, the overall inter-provincialincome disparity mainly rormed by inter-regional inequality or the urban-rural inequality.All measure results based on different angles and different data show that the percentagedcontribution degree of inter-group income inequality keep a gradual increase from30%~50%in the beginning of reform and opening to the maintaining of60%~80%currently. Fourth, the income inequality in rural regions is more significant than it in urbanregions. Fifth, the formation and expansion of the regional income inequality in China isaffeced by the of combined factors in which the imbalance of based economic elementsand all kinds of structural contradictions are the fundamental origin. Furtherly, Amongthose in fluence factors that affect regional income inequalities, the economic structure andphysical capital plays a fundamental role and they are the first important factors; humancapital, education etc. are the pivotal factors and their contribution is the second important;urbanization and globalization have an important impact to regional income disparitiesfrom different aspects; systems, policies and other non-economic factors can not beignored.Finally, this thesis discusses how to control regional income disparities and regulateregional income distribution effectively through reasonable channels and methods in aparticular environment. It considers to provide policy implications for our country.