Abstract: Abstract:Whether or not the inequality index of income distribution in China based on household statistical samples actually reveals the income discrepancy is questioned in some literature. This paper develops a method to verify if the samples of the household income are entire or not by fitting them to Pareto distribution, which predicts the decrease in number of people given the increase in income. It is found that the income data in 1995 are biased and result in underestimating the inequality of income distribution within the richest 20% residents in rural areas and overestimating that in urban areas. But their impact upon the degree of inequality is very slight and insignificant, and can be almost ignored upon the whole population.