Analysis of Factors Related to Income Inequality between Urban and Rural Areas and Rising Incomes in Both Areas: Using Nationwide Data on Taxable Income of Taxpayers

Abstract

Based on taxable income from work plus capital gains on stocks and real estate, a contribution analysis was used to clarify reasons for income inequality between urban and rural areas. A fixed-effects analysis clarified factors behind rising incomes in both areas. For the former, the results indicated that capital gains on stocks and real estate were factors in the long term (2009–2018). Capital gains on stocks was a factor during the administrative changeover (2012–2013). Regarding the latter, while capital gains on stocks proved a factor in both urban and rural areas, effects were more pronounced in urban areas.