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Table 4 Breakdown of the redistribution effects before and after the reform based on GE2 and GE−1

From: The effects of China’ s VAT enlargement reform on the income redistribution of urban households

Group Inequality before tax RE
  \(\text {GE}_{\theta }^{x}\) Weight Contribution Before reform After reform
(1) (2) (3) (4) (5) (6)
GE2
G1 0.0394 0.1407 0.0043 −0.0021 −0.0019
G2 0.0043 0.3779 0.0013 −0.0013 −0.0011
G3 0.0036 0.6878 0.0019 −0.0015 −0.0014
G4 0.0049 1.273 0.0048 −0.0013 −0.0012
G5 0.1044 4.2148 0.3377 −0.0035 −0.0031
Between 0.1694 . 0.6501 −0.002 −0.0019
Total 0.2605 . 1 −0.0061 −0.0056
GE−1
G1 0.1078 2.6663 0.227 0.0149 0.0159
G2 0.0044 1.6268 0.0056 −0.002 −0.0017
G3 0.0036 1.2057 0.0034 0.0008 0.0029
G4 0.0049 0.8863 0.0034 −0.0017 −0.0015
G5 0.0566 0.4871 0.0217 −0.0047 −0.0039
Between 0.1873 . 0.7389 −0.0034 −0.0032
Total 0.2535 . 1 0.0028 0.0044
  1. (4)=(2)×(3)×100 %, (9)=(7)×(8)×100 %, where (3) and (8) represent the weights assigned to each group. Assume the average income of the ith group is \(\overline {y_{i}}\), the overall average income is \(\overline {y}\), the ratio of the population of the ith group to the overall population is m i , and the weight is W i , then \(w_{i}=m_{i}\left (\frac {\overline {y_{i}}}{\overline {y}}\right)^{\theta }\)