Chinese Residents Asset Inequality Study

Since the 21 st century, the rapid progress has been made in science and technology and world economy is witnessing a rapid development, especially under the background of economic globalization, the development of economy has done more rapidly. But at the same time, inequality in many countries in the world(income, assets, wealth and welfare, etc.) is on the increase. More than 30 years of reform and opening up, China’s economic development has made remarkable achievements and people’s living standards has improved significantly. But as the biggest developing country in the world, China’s gap between the rich and the poor has become a serious problem,meanwhile inequality problem is intensifying. China has been a lot of literature about income inequality, while the study about asset inequality has been extremely rare.In view of this, in this paper, the residents’ asset inequalities are studied. Because the individual focus on the current level of assets and expected future income in the consumption and saving. That is the stock of assets determines individual consumption and savings rather than current income does. Furthermore, the distribution of the assets largely affects national consumption and savings structure, so the normal operation of macroeconomic is also affected. In addition, because of the economic base,geographical factors and other reasons, the level of inequality of resident assets has been growing.In this paper, we firstly introduce the measure of inequality in the mainstream method and modern method when studying assets inequality. The mainstream methods include the Gini coefficient, Lorenz curve, Theil index, Coefficient of Variation and Coefficient of Torsion, etc. While the modern methods include Bonferroni index and De Vergottini index. Based on this, the advantages,disadvantages and the applicable situation of each index are analyzed, then we compare the B index, the V index and G index the.The results shows that: first, when we need to decompose inequality according to the source of income inequality,we’d better use Gini index. Second, when decomposing inequality by groups,we’d better use Theil index.Third, B index focuses on low-income groups, V index focuses on the high income group, while Gini index focuses on the middle-income groups. Fourth, the B index and the V index do not satisfy the Dalton population principle,while the Gini index does.Fifth, the three indexes all satisfy Pigou-Dalton Principle of Transfers and only B index statisfy thePrinciple of Positional Transfer Sensitivity(PPTS).In this paper,we first use B index,V index and G index to measure inequality on the whole. When decomposing inequality according to the source of income inequality,we use Gini index and Bonferroni index. The results of Gini index shows that the inequality of other non-financial assets(such as luxury) and financial assets, is the highest. When decomposing inequality by groups,Theil index and Bonferroni index are used,both the results state that the gap between the urban and rural have little impact on total inequality.Theil index found that rural residents asset inequality levels higher than urban residents,while in Bonferroni the opposite takes place.Owing to their sensitivity to the different groups and the government’s welfare policy.Theil index is sensitive to changes in the income of high-income groups, while Bonferroni index is sensitive to changes in the income of low-income groups.When decomposing inequality by region,we used Theil index and Bonferroni indexs,both the results state that regional inequality have little impact on the total inequality, inequality is the highest in eastern and western area, the inequality is the lowest in the central.In a word, the following suggestions are put forward. First, the measurement of inequality should be used synthetically. Second, the government’s welfare oriented implementation must be combined with the sensitivity of different index. Third, take different measures to reduce the urban internal inequality and rural inequality. Fourth,with regard to the different characteristics of different area,different kinds of measures shoud be taken to narrow the eastern, central and western assets within the gap.