NBS reveals Gini coefficient methods (2)

A figure of zero represents equally distributed wealth, with a figure of one representing all wealth concentrated in one individual's hands. The recognized global warning level for unequal distribution of wealth is 0.40.

NBS chief Ma Jiantang announced on January 18 that the country's Gini coefficient stood at 0.474 last year, down from 0.477 in 2011 and a peak of 0.491 in 2008.

The NBS figures raised disputes from some academic institutions that had come up with higher Gini coefficients. And some media reports and Internet users called on the government to publicize its calculation methods.

The Institute of Social Science Surveys under Peking University published a Gini coefficient of 0.514 for 2009, and the National Survey Research Center at Renmin University of China calculated an index of 0.555 for the same year.

The NBS confessed that it is difficult to collect certain types of household income data.

"The major issues in Gini coefficient figures are not their calculation formulas, but the problems in data collection caused by increasing forms of gray income," said Zheng Xinye, a professor at the School of Economics at Renmin University of China.

"A lack of data from high-income households also artificially lowers the Gini coefficient, because wealthier people usually do not like to respond to surveys," Zheng noted.

Zheng said the main cause for lower results in the NBS figures is that they used different household samples. "The income of the wealthy households surveyed by the bureau is lower than in those surveyed by the institutions."