Income inequality and growth from functional orientation and spatial policy: Case study of Tibet, China

Abstract

Economic inequality and poverty are problems experienced by many countries. Considerable attention has been paid to these issues in recent times. Studies on economic inequality have been characterized by geographical disparities and a lack of consideration of functional orientation. As one of the most typical and featured mountainous areas in Western China, Tibet demonstrates both the necessity and urgency of conducting studies on income inequality and growth issues. This paper proposes to address these problems by exploring the temporal and geographical variations in income inequality in Tibet, thereby revealing the differences in functional zones. Spatial Markov chains and panel regression analysis were applied to identify the spatial-temporal dynamics of income disparity. The results of this study show that (1) the overall income inequality in Tibet shows an expanding trend in the period 2005–2010 and a converging trend in the period 2010–2015, and there is a large disparity in income inequality between functional zones; (2) Tibetan farmers and herdsmen may face great difficulties in achieving substantial growth in the near future; (3) frontier counties, cultivated land, and grassland areas have negative impacts on income growth, while cordyceps counties, GDP per capita, agricultural product proportion, transfer payments, the ratio of non-agricultural employment to the total employment, the length of the average schooling year, and the slaughter rate of cattle and sheep have positive impacts; and (4) functional orientation has made great differences to income inequality and its mechanism. In light of these results, evidence-based policies have been formulated to boost average household income and narrow income inequality in Tibet.