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Spatial Patterns of Expenditure Inequalities in Indonesia: 1987, 1990 and 1993

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  • Takahiro Akita
  • Rizal Affandi Lukman

Abstract

This article investigates the contribution of inter-regional disparity to total national inequality in household expenditure, by decomposing national inequality into within- and between-province components. This is done by applying the Theil inequality decomposition technique to household expenditure data from the National Socio-Economic Survey. Whereas inter-provincial disparity accounted for 12-14% of total inequality among urban households and 7-8% among rural households, urban-rural disparity accounted for 22-24% of total national inequality. A Kuznets curve drawn according to the 1993 Susenas data indicates a peak inequality value of 0.27 (using Theil index T) when the share of urban households reaches 53.2%; this share is much larger than the actual 1993 urbanisation level of 32.1%. Further urbanisation is therefore likely to raise total inequality, even if other conditions remain stable.

Suggested Citation

  • Takahiro Akita & Rizal Affandi Lukman, 1999. "Spatial Patterns of Expenditure Inequalities in Indonesia: 1987, 1990 and 1993," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(2), pages 67-90.
    • Handle: RePEc:taf:bindes:v:35:y:1999:i:2:p:67-90
    DOI: 10.1080/00074919912331337597
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    References listed on IDEAS

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    1. Takahiro AKITA & Rizal Affandi LUKMAN & Yukino YAMADA, 1999. "Inequality In The Distribution Of Household Expenditures In Indonesia: A Theil Decomposition Analysis," The Developing Economies, Institute of Developing Economies, vol. 37(2), pages 197-221, June.
    2. Takahiro Akita, 2002. "Income Inequality in Indonesia," Working Papers EMS_2002_02, Research Institute, International University of Japan.
    3. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
    4. Thorbecke, Erik, 1991. "Adjustment, growth and income distribution in Indonesia," World Development, Elsevier, vol. 19(11), pages 1595-1614, November.
    5. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    6. J.S. Uppal & Budiono Sri Handoko, 1986. "Regional Income Disparities in Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 34, pages 287-304.
    7. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    8. Daniel Kameo & Piet Rietveld, 1987. "Regional Income Disparities in Indonesia: A Comment," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 35, pages 451-459.
    9. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
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    Cited by:

    1. Perdamen Sagala & Takahiro Akita & Arief Yusuf, 2014. "Urbanization and expenditure inequality in Indonesia: testing the Kuznets hypothesis with provincial panel data," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 133-147, October.
    2. Mitsuhiro Hayashi & Mitsuhiko Kataoka & Takahiro Akita, 2014. "Expenditure Inequality in Indonesia, 2008–2010: A Spatial Decomposition Analysis and the Role of Education," Asian Economic Journal, East Asian Economic Association, vol. 28(4), pages 389-411, December.
    3. Anis Chowdhury & Iyanatul Islam, 2010. "Revisiting Shared Growth and Examining Horizontal Inequality," Chapters, in: Rajah Rasiah & Johannes Dragsbaek Schmidt (ed.), The New Political Economy of Southeast Asia, chapter 4, Edward Elgar Publishing.
    4. Takahiro AKITA & Rizal Affandi LUKMAN & Yukino YAMADA, 1999. "Inequality In The Distribution Of Household Expenditures In Indonesia: A Theil Decomposition Analysis," The Developing Economies, Institute of Developing Economies, vol. 37(2), pages 197-221, June.
    5. Takahiro Akita & Sachiko Miyata, 2008. "Urbanization, educational expansion, and expenditure inequality in Indonesia in 1996, 1999, and 2002," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 13(2), pages 147-167.
    6. Takahiro Akita & Sachiko Miyata, 2018. "Spatial Inequalities in Indonesia, 1996–2010: A Hierarchical Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(3), pages 829-852, August.
    7. Hal Hill, 2002. "Spatial Disparities in Developing East Asia: a survey," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 16(1), pages 10-35, May.
    8. Takahiro Akita, 2017. "Educational Expansion and the Role of Education in Expenditure Inequality in Indonesia Since the 1997 Financial Crisis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(3), pages 1165-1186, February.

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