Based on 2006 urban survey data of the Ningxia Hui Autonomous Region, this paper studies the impact of ethnic characteristics on the region's income determination mechanism. Using the decomposition methods of Blinder and Oaxaca, Fields, and Morduch and Sicular, we analyze income gaps between employed Hui and Han as well as income inequality within the two groups. The main conclusions are that there is almost no income gap between Han and Hui in Ningxia, but different ethnic characteristics affect the income determination mechanism. Ethnic factors such as religion and social capital have no obvious effect on the income determination.
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