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Abstract: This paper calculates the urban, rural and general Gini coefficients (hereinafter referred to as GC) of household income in 27 provinces, municipalities and autonomous regions of China between 1995 and 2010 using GC calculation formulas. After calculating the GCs, this paper analyzes their trends using density function estimation in nonparametric econometrics. The results show that the GCs of household income in provincial regions tend to rise from coastal regions to inland regions. In other words, the GCs of household income in the regions tend to rise from the east to the west and they appear to be concentrated and region-specific. A discriminate analysis of economic growth and income distribution in the provincial regions by income level and GC also shows a regional characteristic, consistent with the division of eastern, central and western China and that as one analyzes household income from the east to the west, income distribution becomes more unequal and income level becomes lower.
Key words: Gini coefficient, density function, income level, income distribution JEL Classifications: D63, E25, R12
(ProQuest: ... denotes formulae omitted.)
1. Introduction
Since 1978, China's economic system has undergone profound and historical changes. It has transformed from a planned economy to a market economy and from a low-income economy to a middle-income economy. With this so-called "double transition," income disparity in China has widened quickly and continued to rise after exceeding the international alarm line (GC at 0.4) in 1993, making China one of the countries with most severe income inequality. Many scholars have sought to explain why income disparity in China continues to grow. Most scholars approach the issue by analyzing economic growth, institutional reform and government policies.
Although there has been much research on income disparity in China, few studies are statistics-based or with consistent estimation revealing constraints in methodology and data availability. Chen (1994, 2002) was the first one to have systematically studied the issue and provide time series data. In late 1980s, Chen calculated the population/income GC, household/income GC and GC by other income standards from 1981 to 1995, using hierarchal weighted method. In 2002, Chen calculated the national GCs from 1988-1999. However, there is a wide discrepancy between the two calculations on account of different statistics sources. Xiang (1998) calculated the...