A Study Of Income Distribution Gap

In the early years of Reform and Opening, in order to mobilize the economic development activity better, our country chose to let some people and some regions get rich first, and then led the other part of regions and people become rich, and achieve the goal of common prosperity. With the development of the China’s economic, people’s income levels are constantly improving. But we must take note of the gap between residents distribution is gradually expanding with the absolute income growing. Rational income distribution gap is very important for social and economic development, and is an important foundation for promoting the development of socialist society. Rational income distribution gap is not only an important manifestation of social fairness, but also an inevitable requirement of social peace and stability. Therefore, we must take into account both efficiency and equity when China accelerate the process of market.Today, China’s income gap has attracted the attention of many scholars, it also has caused a number of social conflicts events. In recent years, the Chinese government’s reports have paid attention to the income gap and put forward policy to build a reasonable distribution of income, and regard it as one of the most important work of our government. The Chinese Household Financial Center in The Southwest University of Finance released a survey report that the Gini Coefficient of China in2010was0.61. The report has caused a lot of controversy.The income distribution is an important research topic in the field of economics. In order to investigate the present situation and the reasons of China’s income gap, we reference the theoretical literature in domestic and foreign, and select a suitable measurement method of Income Gap in China. Combined with the report by the CHFS and the accuracy of the controversy about it, then we analyze the reasonableness of CHFS weight design. We use the relevant knowledge of statistics to research the China’s income gap by their data. The main process is as follows. First, we analysis the controversy about the CHFS report and put forward our views on it. After that, we choose to correct the sample weight by national census data.Second, there are many measurement methods of income gap, for example: the Gini Coefficient, the relative average method, the Theil index and so on. We will analyze these methods’ advantages and disadvantages. The final choice of the method is the Gini Coefficient.Third, we will get two kinds of the Gini coefficient by the two sample weights. Use the adjusted ample weight to describe the status quo of China’s income gap. We will get the information about the gap between urban and rural incomes, the gap among different industries and different levels of education. Finally, we can find that the problem of the gap among residents’income is already very serious.Fourth, because there are many factors affect the Income Gap in China, we choose to extract the principal component factors. Then construct multivariate linear model by the principal component factors. We will make relevant policy recommendations after analyzing the causes of income inequality generated.