The Impact Of Regional Price Differences On Income Gap Of China

At present, Chinese government and academic circles have paid close attention to regional income gap of China, and this paper studies the impact spatial price differential throws on it. Since Chinese official statistical agencies have not yet measured Spatial Price Index(referred to as SPI), systematically researching SPI of China and its influence to regional income gap is of both practical and theoretical significance. The thesis includes the following parts.Firstly, we analyze the scientific connotation of SPI and its measurement methods.SPI which reflects regional difference in the cost of living is a statistical index which measures the price level difference among areas. The existing measurement methods of SPI are mainly classified into non-random methods which mainly include Basket Cost method, Fisher Index method, Minimum Spanning Tree method, and random methods which majoritily contain CPD method, EKS method, Unit Value method, Engel Curve method and AIDS Expansion method.Secondly, this paper computes SPIs of 31 provinces of China from 2002 to 2013 using Basket Cost method, and finds that price levels vary largely among different provinces in China whose SPIs lay in the reasonable range of 0.86~1.25.Then, the research measures IGIs of 31 provinces of China from 1978 to 2014 based on the original Income Gap Index(referred to as IGI), and concludes that there are obvious classes in the income gap among different provinces in China and their IGIs spread in the wide scale of 0.73~1.83.Further, this paper constructs Spatial Panel Data Model based on the analysis of the mechanism regional price differential affects spatial income gap of China, and empirically analyze the specific influence. The empirical results show that to the vast majority of provinces in China having been adjusted by SPI real income disparity is less than nominal income gap, and that regional income disparity will expand 1% if spatial price differential enlarges 1%, and that to regional income gap the level of economic development affects more than spatial price differential.In conclusion, the possible innovations of this paper are:(1) Summarizing the main measurement methods and data processing methodologies on SPI, and measuring SPIs of31 provinces of China from 2002 to 2013 through Basket Cost method which ends up with a comprehensive and systematic study of SPI in China.(2) Originally constructing regional Income Gap Index(IGI), and measuring IGIs among 31 provinces of China from 2002 to2014.(3) Constructing Spatial Panel Data Model based on the analysis of the mechanism regional price differential affects spatial income gap of China, and empirically analyzing the influence regional price differential throws on spatial income gap of China.