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Does military spending affect inequality in South Africa? A revisit

Author

Listed:
  • Hinaunye Eita

    (College of Business and Economics, University of Johannesburg)

  • Mduduzi Biyase

    (College of Business and Economics, University of Johannesburg)

  • Thomas Udimal

    (Southwest Forestry University)

  • Talent Zwane

    (College of Business and Economics, University of Johannesburg)

Abstract

Previous investigations on military spending-inequality nexus (in South Africa) were underpinned by the assumption that military spending and inequality behaves in symmetric fashion and employed linear autoregressive distributed lag (ARDL) model in their analysis. This paper extends and improve upon prior studies by investigating the short-run and long-run asymmetric effect of military spending on South Africa's income inequality. Using annual data from 1980 to 2017 and asymmetric autoregressive distributed lag (NARDL) model by Shin et al. (2014), our paper revisits the military spending-income inequality nexus. We find evidence to suggest an asymmetric association between military and income inequality - income inequality responds differently to positive and negative shocks of military spending in the long- and short-run. Based on these findings, we are inclined to conclude that the NARDL model delivers more accurate estimates and provides nuanced insights that the traditional linear ARDL.

Suggested Citation

  • Hinaunye Eita & Mduduzi Biyase & Thomas Udimal & Talent Zwane, 2022. "Does military spending affect inequality in South Africa? A revisit," Economics Working Papers edwrg-03-2022, College of Business and Economics, University of Johannesburg, South Africa, revised 2022.
    • Handle: RePEc:ady:wpaper:edwrg-03-2022
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    inequality; military spending; ARD; NARDL;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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