The Impact of Coal Prices on Regional and Urban-Rural Income Inequality in China

Coal plays an important role in China's economic and income growth. This paper uses provincial panel data from 2007 to 2022 in China and employs the panel ARDL model to explore the impact of coal prices on regional and urban-rural income inequality in China based on information of coal price shocks. Empirical results show that: (1) Coal price shocks have a significant long-term effect on income inequality in coal exporting provinces, but have no significant effect on importing provinces. (2) This impact is asymmetric, indicating that the decrease in coal prices has to a greater extent damaged income equality in coal exporting provinces. (3) Coal price shocks have a significant effect on urban-rural income inequality, supporting the energy ladder theory of urban-rural disparity in China. Overall, this research provides an energy perspective for China to improve income inequality issues. Stable coal prices and orderly energy transition have important practical significance for coal exporting provinces and rural areas in China.