Changes in the source of China's regional inequality

Abstract

This paper examines whether the dominant sources of China's regional inequality have changed since the early 1980s. We adopt the decomposition method introduced by Tsui (1993) to facilitate comparisons with his results for 1982. The decomposition analysis shows that the dominant sources of overall regional inequality in output have shifted from the intraprovincial to interprovincial inequality, from the rural–urban to intrarural inequality, and also from the disparity within the coast to between the coast and the interior. In the case of consumption, however, the intraprovincial inequality, the rural–urban inequality, and the disparity within the coast are the major factors of the overall regional inequality.