Household Income Determination and Regional Income Differential in Rural China

Income inequality in China at the household level is assessed by taking into account differences in needs between households and by using individuals as the unit of analysis. Inequality in China as a whole is not particularly low, largely for locational reasons. The urban — rural gap in average income is very important and very little of it can be attributed to household characteristics. Inequality is also due to differences in mean income between coastal China, central China and western China. A considerable number of characteristics measured at the household level are found to affect income. There are, however, some segments of Chinese society in which income is quite equally distributed.