Analysis Of The Influence Exerted By Productive Factors’ Prices On Income Disparity In China

With the development of market economy and the policy of reform and opening up, unbalanced Economical development in China between urban and rural areas, between regions and between industries has become increasingly prominent, which has brought the existence of income gap in these three respects. And income disparity will pose potential threat to China’s social order and stability as well as the sustainable and healthy development of economy. So to study the existence and expansion of the income gap from a new perspective of productive factors becomes possible and necessary. This paper is divided into the following three parts:The first part includes the first and second chapter. Chapter1describes the research background and significance, corresponding literature review and research content and methods. Chapter2is the theoretical basis, including the definitions of several indicators, measurements of income gap, and the brief introduction of the theory of income distribution.The second part is composed of the third, fourth and fifth chapter. Chapter3does a qualitative and quantitative analysis of the income gap between urban and rural China, income gap between three regions and income gap between the industries. Chapter4uses wage to measure labor cost, land acquisition cost to measure land price, the stock price to represent the price of capital and executive wage to measure entrepreneurship price so as to establish a systematic analysis of the current development of four productive factors’prices. Chapter5establishes the model between the four productive factors’prices and regional income disparity, then does ADF test, JJ test, Granger causality test and empirical OLS regression to determine the specific effects of four productive factors’prices on regional income gap. And it gets the conclusion that increase of labor price and capital price can lower Gini coefficient separately, while decrease of land price and executive pay can lower Gini coefficient.The final part is chapter6, which gives some suggestions about how to narrow the income gap from the perspective of productive factors.The main innovation point of this paper is having done a systematic analysis of prices of productive factors, and made suggestions to narrow income gap from the perspective of productive factors.