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The income gap among residents is one of the important factors that restrict the development of economy and society. The emphasis of this study lies in investigating the reasons for the change of the income gap among Chinese residents. The Gini coefficient, a set of generalized entropy index and the relative polarization index are obtained on the data of CFPS. The results show that the income gap in China has been increasing year by year since 2012. Different from some ideas that components are the main factors affecting the change of income gap, the decomposition results show that the conditional components make the significant variation of income gap. This provides a new perspective to explain the causes of income gap changes. It may be necessary to increase the income of low-income groups and improve their status with dynamic assistance by stages and categories.

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Composition Component or Conditional Component? A New Explanation on the Change of the Income Gap among Chinese Residents from the Perspective of Counterfactual