The Changes of Income Inequality in Rural China: Permanent or Transitory? ——Empirical Evidence from CHNS
JIN Jing1,2, WANG Yan-min3
1.School of Accounting, Zhongnan University of Economics and Law, Wuhan 430073, China; 2.School of Accounting, Anhui University of Finance and Economics, Bengbu 233030, China; 3.School of Statistics and Applied Mathematics, Anhui University of Finance and Economics, Bengbu 233030, China
Abstract：
An empirical analysis based on the data from China Health and Nutrition Survey shows that the income inequality in rural China presents an inverted U-shape curve which shows a steady rise since the late 1990s and a sharp drop after peaking in 2005. The estimated results of error component model show that cross section variance in rural residents’ income is mainly composed of transitory variance. In addition, the widening of income inequality reflects the growth both in permanent variance and transitory variance, the latter playing a much bigger role. The evidence suggests that the income dynamics process in China is different from that in western countries. Therefore, a combination of customized tools is required in the intervention of income distribution.
JIN Jing, WANG Yan-min.The Changes of Income Inequality in Rural China: Permanent or Transitory? ——Empirical Evidence from CHNS[J] Economic Survey, 2018,V35(2): 35-40
2018 
