An Impact Factors model of income distribution based on GINI coefficient

Abstract

The analysis of income distribution around the world is very practical, and cross-country datasets are used to study the effects of different factors on unequal income distribution. Based on the calculation and decomposition of gini coefficient, the revenue distribution influence factor model based on gini coefficient is constructed. Reasinference tests the decomposition model using t statistics and f statistics, showing that the statistical output residual approximate normal distribution, which verifies the effectiveness of the model. Also set up 6 determinants, including Tax Revenue, Population ages 65 and above, Gross savings, Poverty head count ratio at national poverty lines, Labour force with advanced education, GDP per capita to study the impact of different factors on the income distribution around the world. The results show that increasing in old population rate, gross saving rate, and tax revenue rate lead to a decrease in income inequality, whereas increasing in poverty rate, advanced education level, and GDP per capita leads to an increasing in income inequality.