Report on Chinese Household Income Gap
1. Chinese Household Income Gini Coefficient
Gini coefficient is an index commonly used in economics for measuring resident's income gap; the greater the Gini coefficient, the greater the income gap between residents.
It is calculated according to the data of China Household Finance Survey (CHFS), the Gini coefficient of China’s household income in 2010 is 0.61, the Gini coefficient among the urban households is 0.56, and that among the rural households is 0.60.
2. Decomposition of Gini Coefficient
Based on the income sources, decomposition of the Gini coefficients is conducted and the contribution rates of each kind of income to the overall Gini coefficient are observed. Generally, Chinese resident's income gap mainly comes from wage income, industrial and commercial income and transfer income, and the contribution rates of such three kinds of income to the Gini coefficient are 49.3%, 17.4% and 23.3% respectively.