Regional Inequalities and Its Determinants in Rural China：An Empirical Study Based on Agricultural Household Level Data

Using 1000 agricultural household survey data in 2002, this paper employs Gini coefficient and the Theft index to explore the regional inequalities and its determinants in rural China. We first measure the overall rural income inequality, and then decompose it by region and by factor （source of income） respectively. Third, we construct an econometric model to analyze the determinants affecting the income inequality indexes. Our main finding is that although Gini coefficient and Theft index is at a normal level, we need to point out that there exists a risk that the income inequality may climb up with the misbalanced growth of regional economy without taking adequate policy into account. At the end of this paper, policy suggestion is given： governments should offer more financial support for the less developed rural areas, where income level is quite low. An alternative choice is to enhance the transfer payment for the low-income people, and help them to get access to profitable economic project. In the long run, it is especially important to strengthen the farmers＇ professional training, and to increase their migrant ability to nonagricultural career.