IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2022i1p401-d1015899.html
   My bibliography  Save this article

Structural Changes and Income Inequality in China, 2000–2017: A Bi-Dimensional Inequality Decomposition Analysis

Author

Listed:
  • Liang Tan

    (School of International Business and Management, Sichuan International Studies University, Chongqing 400031, China)

  • Takahiro Akita

    (IUJ Research Institute, International University of Japan, Niigata 949-7277, Japan)

Abstract

The paper explores the changes in the determinants of interprovincial inequality in China during the period of 2000 to 2017 by way of bi-dimensional decomposition method. The method integrates two inequality decompositions by both regional groups and gross regional product components, helping us to evaluate the contributions of gross regional product components to both within-region and between-region inequalities, and to overall interprovincial inequality. It is found that the overall inequality exhibited a declining trend and the “Western Development Strategy” in Region 3 during the second sub-period from 2005 to 2012 contributed mostly to the decrease in interprovincial inequality. Moreover, as 57.3 percent of the interprovincial inequality is accounted for by the between-region inequality component, more preferential policies in terms of tax deduction, transfer payments, foreign trade promotion and the like should be issued to the less developed interior provinces in Region 2 and Region 3.

Suggested Citation

  • Liang Tan & Takahiro Akita, 2022. "Structural Changes and Income Inequality in China, 2000–2017: A Bi-Dimensional Inequality Decomposition Analysis," Sustainability, MDPI, vol. 15(1), pages 1-11, December.
    • Handle: RePEc:gam:jsusta:v:15:y:2022:i:1:p:401-:d:1015899
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/1/401/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/1/401/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. Wei Sun & Xiaona Lin & Yutian Liang & Lu Li, 2016. "Regional Inequality in Underdeveloped Areas: A Case Study of Guizhou Province in China," Sustainability, MDPI, vol. 8(11), pages 1-18, November.
    3. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January.
    4. Peng Bin, 2016. "Dynamic Development of Regional Disparity in Mainland China: An Experimental Study Based on a Multidimensional Index," Sustainability, MDPI, vol. 8(12), pages 1-28, December.
    5. Borooah, Vani K. & Gustafsson, Bjorn & Li, Shi, 2006. "China and India: Income inequality and poverty north and south of the Himalayas," Journal of Asian Economics, Elsevier, vol. 17(5), pages 797-817, November.
    6. Cheng, Yuk-shing & Li, Sung-ko, 2006. "Income inequality and efficiency: A decomposition approach and applications to China," Economics Letters, Elsevier, vol. 91(1), pages 8-14, April.
    7. Kanbur, Ravi & Zhang, Xiaobo, 1999. "Which Regional Inequality? The Evolution of Rural-Urban and Inland-Coastal Inequality in China from 1983 to 1995," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 686-701, December.
    8. Xiaosu Ye & Lie Ma & Kunhui Ye & Jiantao Chen & Qiu Xie, 2017. "Analysis of Regional Inequality from Sectoral Structure, Spatial Policy and Economic Development: A Case Study of Chongqing, China," Sustainability, MDPI, vol. 9(4), pages 1-17, April.
    9. Takahiro Akita, 2003. "Decomposing regional income inequality in China and Indonesia using two-stage nested Theil decomposition method," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 37(1), pages 55-77, February.
    10. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arthur Charpentier & Stéphane Mussard, 2011. "Income inequality games," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 529-554, December.
    2. Guanghua Wan & Zhangyue Zhou, 2005. "Income Inequality in Rural China: Regression‐based Decomposition Using Household Data," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 107-120, February.
    3. Michele Giammatteo, 2007. "The bidimensional decomposition of inequality: A nested Theil approach," LIS Working papers 466, LIS Cross-National Data Center in Luxembourg.
    4. Teixidó Figueras, Jordi & Duro Moreno, Juan Antonio, 2012. "Ecological Footprint Inequality: A methodological review and some results," Working Papers 2072/203168, Universitat Rovira i Virgili, Department of Economics.
    5. Xing, Li & Fan, Shenggen & Luo, Xiaopeng & Zhang, Xiaobo, 2006. "Village Inequality in Western China," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25390, International Association of Agricultural Economists.
    6. Anton I. Votinov & Samvel S. Lazaryan & Vyacheslav N. Ovchinnikov, 2019. "Regression-Based Decomposition of Income Inequality Factors in Russia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 74-89, October.
    7. Guido Erreygers & Roselinde Kessels, 2013. "Regression-Based Decompositions of Rank-Dependent Indicators of Socioeconomic Inequality of Health," Research on Economic Inequality, in: Health and Inequality, volume 21, pages 227-259, Emerald Group Publishing Limited.
    8. Anthony Shorrocks, 2013. "Decomposition procedures for distributional analysis: a unified framework based on the Shapley value," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 99-126, March.
    9. Carlos Gradín, 2018. "Quantifying the contribution of a subpopulation to inequality: An application to Mozambique," WIDER Working Paper Series 60, World Institute for Development Economic Research (UNU-WIDER).
    10. Sebastian Leitner, 2015. "Drivers of wealth inequality in euro area countries," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 137, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    11. Lwin Lwin Aung & Peter Warr, 2021. "Decomposing changes in inequality: Evidence from Myanmar," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1172-1196, August.
    12. Carlo Vittorio FIORIO, 2008. "Understanding Italian inequality trends: a simulation-based decomposition," Departmental Working Papers 2008-26, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    13. Heshmati, Almas, 2004. "A Review of Decomposition of Income Inequality," IZA Discussion Papers 1221, Institute of Labor Economics (IZA).
    14. Frank Cowell & Carlo Fiorio, 2011. "Inequality decompositions—a reconciliation," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 509-528, December.
    15. Wu, Dengsheng & Yuan, Lili & Li, Ruoyun & Li, Jianping, 2018. "Decomposing inequality in research funding by university-institute sub-group: A three-stage nested Theil index," Journal of Informetrics, Elsevier, vol. 12(4), pages 1312-1326.
    16. Benjamin, Dwayne & Brandt, Loren & Giles, John, 2005. "The Evolution of Income Inequality in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 769-824, July.
    17. Okushima, Shinichiro & Uchimura, Hiroko, 2005. "Economic Reforms and Income Inequality in Urban China," IDE Discussion Papers 25, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    18. Xin Meng, 2004. "Economic Restructuring and Income Inequality in Urban China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 357-379, September.
    19. Armida Alisjahbana & Takahiro Akita, 2020. "Economic Tertiarization and Regional Income Inequality in a Decentralized Indonesia: A Bi-dimensional Inequality Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 151(1), pages 51-80, August.
    20. Rui Hao & Zheng Wei, 2010. "Fundamental causes of inland–coastal income inequality in post-reform China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(1), pages 181-206, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2022:i:1:p:401-:d:1015899. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.