Inequality in the Distribution of Household Expenditures in Indonesia: A Theil Decomposition Analysis

Akita, Takahiro; Lukman, Rizal Affandi; Yamada, Yukino

doi:10.1111/j.1746-1049.1999.tb00231.x

Cited by 69 publications

(44 citation statements)

References 36 publications

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“…Several studies examine the factors underlying interregional income inequality, employing various inequality measures and factor decomposition techniques (e.g., Islam and Khan 1986;Akita 1988;Azis 1990;Akita and Lukman 1995;Garcia and Soelistianingsih 1998;Akita et al 1999;Hill 2000;Tadjoeddin et al 2001;Akita and Alisjahbana 2002;Hill 2002;Akita 2003;Milanovic 2005;Akita and Miyata 2008;Hill 2008;Akita and Miyata 2010;Kataoka 2010;Akita, et al 2011;Hayashi et al 2014). One decomposition technique for income inequality is to analyze the factors affecting gross regional domestic product (GRDP) by sectoral income source and hierarchical regional structure (Akita and Lukman 1995;Tadjoeddin et al 2001;Akita and Alisjahbana 2002;Akita 2003;Miyata 2008, 2010;Kataoka 2010;Akita et al 2011).…”

Section: Introductionmentioning

confidence: 99%

“…One decomposition technique for income inequality is to analyze the factors affecting gross regional domestic product (GRDP) by sectoral income source and hierarchical regional structure (Akita and Lukman 1995;Tadjoeddin et al 2001;Akita and Alisjahbana 2002;Akita 2003;Miyata 2008, 2010;Kataoka 2010;Akita et al 2011). Another method is to analyze the factors associated with expenditure data by household head subgroup, such as province, location, educational attainment, gender, and age (Akita et al 1999;Akita and Miyata 2008;Hayashi et al 2014). However, to the best of our knowledge, very few studies have examined the interregional income inequality associated with efficiency factors in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

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Inequality convergence in inefficiency and interprovincial income inequality in Indonesia for 1990–2010

Kataoka

2017

Asia-Pac J Reg Sci

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We use data envelopment analysis to measure the relative efficiency among Indonesia's provinces in using input to produce output over a 20-year period that includes the global economic crisis. We then employ the inequality decomposition technique of a Theil's second measure to explore the extent to which the efficiency factor contributes to interprovincial income inequality. Our efficiency analysis reveals that most Indonesian provinces improved their relative inefficiency considerably in both resource utilization and allocation. Moreover, the relative inefficiency became convergent across provinces for the period. However, several provinces with serious pure technical and scale inefficiencies still exist in 2010. The province of Yogyakarta critically underperformed in resource utilization, and Central Kalimantan and Papua operate at further suboptimum scales. The former needs to develop appropriate mechanisms to efficiently use its given resources, while the latter need to mitigate business-unfriendly regulations and deal with financial constraints. The inequality decomposition analysis shows that interprovincial convergence of inequality in overall technical inefficiency largely contributed to the reduction in income inequality. The convergence of inequality in resource utilization inefficiency had a greater impact on inequality convergence in overall technical inefficiency than in resource allocation inefficiency. In 2010, pure labor productivity became a substantial new factor in determining income inequality. Since this measure is affected by per capita physical and human capital and technology, the spatial allocation imbalance of these factors has become a new concern in Indonesia.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Inequality convergence in inefficiency and interprovincial income inequality in Indonesia for 1990–2010

Kataoka

2017

Asia-Pac J Reg Sci

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“…The most common measure is certainly the Gini coefficient (Akita et al, 1999). In spite of its prevalence and simplicity, the Gini coefficient does not fit our purposes for two reasons.…”

Section: Empirical Strategy and Methodsmentioning

confidence: 99%

Entrepreneurship and income inequality

Halvarsson

Korpi

Wennberg

2018

Journal of Economic Behavior & Organization

102

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“…Among the empirical studies on income inequality for Indonesia that have been conducted, most of them, for example (Akita, Lukman, & Yamada, 1999;Akita, 2003;Alisjahbana et al, 2003;Cameron, 2000;Chongvilaivan & Kim, 2016;Kaneko, Kaneko, & Managi, 2007;Leigh & van der Eng, 2009;Nugraha & Lewis, 2013) focus more on income inequality decomposition between sub regions and sub groups and income inequality measurement and its development. None of them has been investigating whether economic structural changes, sociological conditions and financialization are responsible for the change in income inequality in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

Determinant of income inequality in Indonesia

Afandi

Rantung

Marashdeh

2017

Econ. J. Emerg. Mark.

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This study examines whether changing economic structure, social conditions, and financialization are responsible for increased income inequality in Indonesia. By employing panel data of 32 provinces in Indonesia that spans from 2007 to 2013, it finds that structural change affects income inequality, increased share of finance reduces inequality, which is against the financialization hypothesis, and social conditions have expected effects on income inequality. While an increased share of both agriculture and service sectors tends to reduce inequality, an increased share of manufacture sector has no effect on inequality. This study finds that falling poverty increases inequality, implying that policy to reduce poverty might not be neutral for inequality and instead cannot prevent it from increasing. Since the higher the college participation rate the higher income inequality tends to be, it does not automatically imply that in order to reduce inequality we need to reduce the number of people who go to college. It might be the case that the college participation rate has not reached a turning point, below which its increase increases inequality, but beyond which its increases reduces inequality. AbstrakPenelitian ini mengkaji pengaruh perubahan struktur ekonomi, finansialisasi, dan kondisi sosial terhadap ketimpangan pendapatan. Menggunakan data panel dengan cross-section 32 propinsi di Indonesia dan rentang waktu 2007-2013, penelitian ini menemukan bahwa perubahan struktural mempengaruhi ketimpangan, kenaikan sumbangan sektor keuangan dalam PDB cenderung menurunkan ketimpangan, yang berarti bertentangan dengan hipotesis finansialisasi, dan kondisi sosial juga berpengaruh terhadap ketimpangan. Sementara kenaikan sumbangan baik sektor pertanian maupun sektor jasa dalam PDB cenderung mengurangi ketimpangan, kenaikan sumbangan sektor industri terbukti tidak mempengaruhi ketimpangan. Studi ini juga menemukan bahwa turunnya tingkat kemiskinan justru manaikkan ketimangan, sehingga kebijakan untuk menurunkan kemiskinan bisa bersifat tidak netral terhadap ketimpangan, melainkan tidak mampu membiarkan ketimpangan untuk tidak naik. Juga ditemukan bahwa kenaikan angka partisipasi kuliah justru menaikkan ketimpangan, yang mengimplikasikan bahwa angka ini belum mencapai titik belok (turning point).

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Inequality in the Distribution of Household Expenditures in Indonesia: A Theil Decomposition Analysis

Cited by 69 publications

References 36 publications

Inequality convergence in inefficiency and interprovincial income inequality in Indonesia for 1990–2010

Inequality convergence in inefficiency and interprovincial income inequality in Indonesia for 1990–2010

Entrepreneurship and income inequality

Determinant of income inequality in Indonesia

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