Income inequality in rural China: regression-based decomposition using household data

Wan, Guanghua, and Zhou, Zhangyue (2005) Income inequality in rural China: regression-based decomposition using household data. Review of Development Economics, 9 (1). pp. 107-120.

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Abstract

A considerable literature exists on the measurement of income inequality in China and its increasing trend. Much less is known about the driving forces of this trend and their quantitative contributions. Conventional decompositions, by factor components or by population subgroups, provide only limited information on the determinants of income inequality. This paper represents an early attempt to apply the regression-based decomposition framework to the study of inequality accounting in rural China, using household-level data. It is found that geography has been the dominant factor but is becoming less important in explaining total inequality. Capital input emerges as a most significant determinant of income inequality. Farming structure is more important than labor and other inputs in contributing to income inequality across households.

Item ID: 10256
Item Type: Article (Refereed Research - C1)
ISSN: 1467-9361
Date Deposited: 08 Apr 2010 23:08
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140201 Agricultural Economics @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910106 Income Distribution @ 100%
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