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Decomposition of China's Income Inequality, 1995-2006


  • Liu Xueliang


This article uses relative entropy to give a simple demonstration of the Theil index, commonly used to calculate and decompose income inequality. A calculation and decomposition analysis of inequality in China from the four aspects of urban-rural income inequality, urban-rural consumption inequality, employers, and industries for the 1995-2006 time series. The results concern the magnitude of the factors affecting Chinese income inequality, the extent of the inequality, and long-term inequality.

Suggested Citation

  • Liu Xueliang, 2010. "Decomposition of China's Income Inequality, 1995-2006," Chinese Economy, Taylor & Francis Journals, vol. 43(4), pages 49-72, July.
  • Handle: RePEc:mes:chinec:v:43:y:2010:i:4:p:49-72

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