Study On Measuring And Early Warning Of Appropriate Regional Income Disparity In China

Since the reforming and opening, China's economy has grown rapidly; the income levels have significantly increased all over the country. Meanwhile, the widening regional income disparity has been drawn wide attention. A certain degree of regional disparities in income within the process of economic development is a universal phenomenon, but huge regional income disparity is neither beneficial to the coordinated development of regional economy nor to the efficient allocation of resource. It impacts on social security and stability, and it will become the obstacle to social and economic development. Although the regional income disparity is one of the hot topics of the research of many scholars, there is no systematic study in academic field for measuring and early warning of appropriate regional income disparity in China.Therefore, analysis on measurement of appropriate regional income disparity will help us make relatively accurate judgments and objective evaluation of appropriate conditions of China's regional income disparity. Analyzing the influencing factors of the regional income disparity will identify the root causes of such enlarging regional income disparity in China. Early warning on appropriate disparity of China's regional income, forecasting the inappropriate trends in regional income disparity may help the government adopt various measures to keep it within the range of moderation and social tolerance as soon as possible, which is not only the reflection of national policy, but also is a reference for country to formulate macroeconomic policies to promote coordinated regional economic development.The whole paper is divided into eight chapters:The first Chapter is an introduction. It introduces the background and significance of the study, domestic and international literature review, research contents and methods, as well as the difficulties and innovations.The second chapter is the connotation and criteria of appropriate regional income disparity. It defines the connotation of appropriate regional income disparity on the basis of theoretical studies, and proposes the criteria for appropriate regional income disparity.The third chapter is the study of the evaluation system for appropriate regional income disparity. It firstly introduced the common-used measure indices of residents'income disparity, especially indices for the regional income disparity. Secondly, it built proper evaluation index system of regional income disparity with 41 indices in four aspects of economic growth, efficiency of resource allocation, social stability and fairness. Then, on the basis of comparing the more methods of economic system coordination measure, we select membership function coordination degree model to calculate composite index and sub-index of the appropriate regional income disparity.The fourth chapter is a comprehensive evaluation of the appropriate regional income disparity in China. We collected relevant statistical data, evaluated appropriateness of the regional income gap at the present stage. We examined the degree of adaptation among regional income disparity and economic growth, efficiency of resource allocation, social stability and fairness, analyzed appropriate regional income disparity trend by multi-angle and multi-level comparison, summarized its characteristics. Through the analysis of composite index and sub-index of the appropriate regional income disparity, it laid the foundation for early warning research illustrated in later chapters.The fifth chapter addresses the influencing factors of regional income disparity and econometric model analysis. Firstly, it theoretically analyzed the influencing factors of the regional income disparity; Secondly, it selected 12 variables such as the physical capital, human capital, the level of urbanization, the opening degree, the degree of marketization, fiscal expenditure, infrastructure construction, the degree of financial development, the population burden ratio, etc, to carry on an empirical analysis on the origins of China's regional income disparity. Further more, it explained influence degree of the relevant factors to the regional income gap in details, which laid the foundation for seeking the warning resource indices of comprehensive early warning of appropriate regional income disparity.In chapter 6, we discussed early warning mechanism of the appropriate regional income gap. Firstly, according to the theories of economic warning, we compared and analyzed economic early warning methods, then we selected early warning models and methods to prepare for the single indicator and composite index warning of appropriate regional income gap; Secondly, we used single warning indicator to conduct appropriate regional income disparity warning, and used early warning model method to build a forecasting model to determine the trend of the future warning degree; Again, we used integrated early warning method to build early warning process of appropriate regional income disparity through the four aspects such as clearing warning indicator, seeking warning resources, analysis warning signs, forecasting warning degree.In chapter 7, we provided empirical analysis of a early warning of China's appropriate regional income disparity. First of all based on single index early warning process, we provided early warning analysis of the appropriate regional income gap using the data over the years. Then in accordance with the Composite Index process, we provided comprehensive early warning analysis of appropriate regional income disparity of each year in China and compared the different results of two different methods.The chapter 8 is the conclusions, recommendations, and prospects. We summed up the conclusions of this study, proposed policy recommendations which promote the appropriate development of China's regional income disparity. Future research directions were also prospected.Through the above research, we draw the main conclusions of the following points:1. From 1990 to 2010, China's regional income disparity generally shows a trend of expansion in the fluctuations. In details:1990 to 1994 showed the trend of rapid expansion, from 1995 to 1998, a narrowing trend,1999 to 2006, it gradually expanded, it fell slightly after 2006. The overall economic and social developments ran well during this period, the economy did grow steadily year by year, the efficiency of resource allocation increased, social stability and fairness rose in the fluctuation. 2. From the evaluation index of the regional income gap, various systems between China's regional income disparity and economic growth, efficiency of resource allocation, social stability and fairness moved forward in a fluctuating state. Overall, from 1991 to 2010, the four categories of appropriate evaluation index showed roughly the same volatility trends, the state performance of 1993,1996,1998,2000,2003 and 2005 is a bit weak. Analysis shows that the regional income disparity in these years fluctuated and deviated from the right track of promotion of economic growth, efficiency of resource allocation, social stability and fairness, eventually led to the situation that the appropriate regional income gap evaluation index became lower than other years, other year indices are more ideal.3. The empirical analysis showed that the regional income disparity in China is mainly affected by the factors, such as stock of physical capital per capita, years of schooling per capita, the urbanization level, FDI per capita, dependence on foreign trade, the ratio of non-state employees in all employees, the share of fixed assets investment of the non-state-owned enterprises, fiscal expenditure per capita, etc. This paves the way for the warning resource indices of appropriate regional income disparity.4. From the results of single index of early warning, it showed serious warning in 1993 and 2000, moderate warning in 1996 and 1998, and slight warning in 1995,2003 and 2005. This indicated that the relationship between regional income disparity and economic and social development was in a very inappropriate, inappropriate and a slightly inappropriate state in those years. The appropriateness of regional income disparity in the next few years is no alarm. Composite index warning expressed serious warning in 2000 and 2005, moderate warning in 1992, 1993 and 1995, slight warning in 1994 and 1998, and no alarm in the rest of years. To draw attention, there is a no alarm period of the four composite warning indices since 2013, but it will be a slightly decline. It should be paid attention to avoid the appropriateness of regional income disparity falling into the light warning area.5. Comparing single index and composite index warning, the results of these two methods is roughly the same. Both forecasted a warning in 1993,1995,1998,2000, and 2005 and slightly different in certain years. It indicated that the result of early warning for the appropriateness of China's regional income disparity is reliable. Two methods display the early warning of appropriate regional income disparity will run under no-alarm state in next few years. This shows the appropriateness of regional income gap will perform well and within a controllable range. In practice, we can use two methods of early warning, in order to improve the reliability and security of the warning.The main innovations of this paper include the following:Firstly, on the basis of combing relative theoretical research, this paper clearly defined the meaning of the appropriate regional income disparity, and proposed criteria that appropriate regional income disparity should coordinate with steady economic growth and efficient allocation of resources, social stability and fairness, which made the guiding ideology of appropriate regional income disparity is more clear and definite. Secondly, it designed evaluation index system of appropriate regional income disparity in four aspects of regional income gap, economic growth, efficiency of resource allocation, social stability and equity with 41 specific indicators, in order to evaluate the appropriateness of regional income disparity from a more comprehensive and reasonable perspective. Thirdly, based on the comparing various methods of economic system coordination measure, it put forward measuring method of evaluation index of the appropriate regional income disparity, and analyzed the situation of China's appropriate regional income disparity. Fourthly, it constructed early warning mechanism of the appropriate regional income gap with two methods of single indicator and comprehensive index warning (clearing warning indicator, seeking warning resources, analysis warning signs, forecasting warning degree), which enriched early warning theory of income distribution disparity.