On the income inequality and stock returns: Canadian province level asymmetric study
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Bin Dai
College:
College of Business and Public Management
Major:
Finance
Faculty Research Advisor(s):
Nazif Durmaz
Abstract:
The research is designed to analyze the effects of stock return on income inequality in Canada, using the data of Stocks Index and GINI coefficient through Linear ARDL and Nonlinear ARDL models. To exclude the impact of aggregation, authors didn’t utilize the data of Canada in national level. Instead, we collected and processed separate data from ten typical provinces. The result reveals that in five provinces, stock return can explain the income inequality in the short run under the linear ARDL model. And seven provinces display stock returns also have the long-term impact on income inequality under the linear model. With the evaluation of nonlinear ARDL model, the result shows that the impact of stock returns on income inequity are more remarkable in short-term and long-term. In seven provinces, positive stock returns exacerbate income inequality and negative stock returns ameliorate income inequality. Significantly, based data of Canada, stock returns emerge asymmetric effect on income inequity.