The Theory And Empirical Analysis Of Income Distribution

Income distribution is one of the important areas of economics. Since China embraced the epic reform and opening-up policies in 1978, China developed with high speed. At the same time, the income gap among residents was growing. It has even become to threat social harmony and stability. Therefore, the study of income distribution is significant to promoting rational distribution of income, to building a harmonious society.As a large province in southwestern of China, Sichuan Province’s economy develops rapidly and living standards of residents improves dramatically. But statistical figures show that in 2007, Income of urban residents was 3.13 times as that of rural residents. Therefore, it is important to study the income gap of Sichuan Province in the context of the national income gap.This paper adopts qualitative and quantitative methods, combines the theory of income distribution with empirical analysis. The income gap is divided into the income gap between urban and rural residents, the internal income gap of urban and rural residents, the income gap among different area residents, and the income gap among industries residents. Some indices which include coefficient of variation, Theil index and the Gini coefficient are employed to measure the income gap of residents. We try to obtain comprehensive, systemic results to reveal the process of evolution for income gap of residents in Sichuan Province. In the meantime, we also discuss the existing problems of income gap. In the finally, some useful policy suggestions are proposed.