Study Of Regional Income Disparity Based On The Gini Coefficient And The Reason Analysis

Developing in a rapid economic growth but with the expansion of the income gap is a common problem in the world, China is no exception. After the reforming and opening up in1978, the rapid growth in coastal areas has led to the rapid growth of China’s whole economy, While the income gap between residents and the gap between regions has become a problem. Which indicators can we use to measure the income gap between regions? How to measure the index? The reason why China has the income gap and how to narrow the income gap between regions has been a concern between researchers.Firstly the article point out the indicators to measure the income inequality, ncluding the Lorenz curve (Lorenz curve), the Gini coefficient (Gini Coefficient), Kuznets ratio (Kuznetz ratio), Theil index (Theil index), coefficient of variation, the absolute poor poverty Index (Poverty Index), Wolfson "polarization index" and Aktinson indicators. After comparing the advantages and disadvantages of each index,we use the Gini coefficient as a tool to measure the income gap between regions.There have two advantages of using Gini coefficient to measure our income gap between regions:Firstly in the world the Gini coefficient is a wildly used index,but our country released the data by the National Bureau in2004and2013,secondly the data measured by official and the data measured by other organizations were different. This paper aims to accurately measure the Gini coefficient in different regions of our country to make up for these two shortages, objective reflection of China’s regional income disparity.Researchers were always to exploring how to measure the Gini coefficient accurately. The methods of foreign scholars include:geometric method, the Gini coefficient mean difference method, covariance method and matrix method; the methods of domestic scholars include:Gini coefficient decomposition, packet -weighted method, a fifth method, population distribution conversion method, the income distribution function method. Based on the principle of calculate easily and narrow the errors, we choose the data from the Chinese General Survey in2003,2006,2008as sample, then process the data to get the distribution function of cumulative frequency and income. Selecting the generalized logistic function to fit the regional income distribution function, finally use the function which Zhongchun Mi and Yonghong Chen developed to formula Gini index.According to the results we can see that from2003to2008in eastern China, the Gini coefficient is more stable but the central region and western region fluctuate wildly; the Gini index in the western is larger than the other two regions and the index in the central regions is the smallest; at last the overall trend is close to the eastern regions.Then I do the Empirical Analysis to find the factors that impact the income gap between regions basis on the Gini index. I use the data in2000-2010of Statistical Yearbook to analysis. There are reasons for the gap between the initial level of human capital, the level of exports, market-oriented and fixed-asset investment, which provides the basis for recommendations to resolve regional income disparities.Finally introduces the measures of developed and developing countries in addressing the income gap between regions. Although the extent of the income gap between regions and the reasons are different from ours but there are many ways we can learn and use. For instance set the objection of narrow the economic gap between regions; making polices to support the backward areas’ economy to growth; strengthening the population and the labor flow between regions; increasing the investment of education and encourage social forces to do the development and building. After summarizing the experience I give some of my suggestions about the western and central regions.