Testing for Multimodality in Russian and Chinese Regional Income Distribution : A Research Note

Rising inter-regional inequality is discussed in the literature for Russia as well as China, leading to the question how regional incomes are distributed. A nonparametric method, the Kernel Density Estimation, is used to estimate the inter-regional income distribution and how this distribution developed during economic transformation. A bootstrap test is applied to test the significance of possible multimodality. In this paper, we use Gross Regional Product per capita of 79 Russian administrative units from 1994 to 2002 as well as 31 Chinese regions from 1978 to 2003 to analyse the development of inter-regional income distribution. The resulting density estimates display between two and five modes but the evidence of multimodality is less pronounced over the whole sample period. Finally, the detected multiple modes relate to only a handful of resource-rich regions or municipalities which has to be taken into account in discussing development of regional inequality