The Trend of the Gini Coefficient of China

32 Pages Posted: 12 Oct 2012  

Jiandong Chen

Southwestern University of Finance and Economics

Dai Dai

Southwestern University of Finance and Economics

Ming Pu

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management

Wenxuan Hou

University of Edinburgh - Business School

Qiaobin Feng

affiliation not provided to SSRN

Date Written: January 5, 2010

Abstract

The literature indicates the problems in the data to calculate the Gini coefficient of Chinese residents’ income. Although many studies have tried to overcome the problem by decomposing the nationwide Gini ratio into urban and rural ones, the final results have been underestimated as a result of the overlapped term or residual in the decomposition. This paper analyses the effects of the overlap term on calculating the overall Gini coefficient by taking a statistical approach, and estimates Chinese Gini ratios from 1978 to 2006. We identify income disparity between rural and urban inhabitants as the dominant factor of nationwide income inequality. In addition, statistical approaches are employed to evaluate the effects of the urbanisation and rural-to-urban average income on the income inequality of the whole nation. The results show that accelerating the pace of urbanisation is the crucial to mitigate Chinese income disparity.

Keywords: income disparity, gini coefficient, China

JEL Classification: D31, L3

Suggested Citation

Chen, Jiandong and Dai, Dai and Pu, Ming and Hou, Wenxuan and Feng, Qiaobin, The Trend of the Gini Coefficient of China (January 5, 2010). Brooks World Poverty Institute Working Paper No. 109. Available at SSRN: https://ssrn.com/abstract=2161034 or http://dx.doi.org/10.2139/ssrn.2161034

Jiandong Chen (Contact Author)

Southwestern University of Finance and Economics ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

HOME PAGE: http://cjd.weebly.com

Dai Dai

Southwestern University of Finance and Economics ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Ming Pu

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management ( email )

55 Guanghuacun Street
Chengdu, Sichuan 610074
China

Wenxuan Hou

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
United Kingdom

HOME PAGE: http://www.wenxuanhou.com

Qiaobin Feng

affiliation not provided to SSRN ( email )

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