Urbanization and Expenditure Inequality in Indonesia: Testing the Kuznets Hypothesis with Provincial Panel Data
AbstractFocusing on Indonesia, this study analyzes the relationship between inequality and the process of urbanization. It performs a panel data regression analysis to test the Kuznets inverted-U hypothesis for urbanization based on a provincial panel data set of 33 provinces over the period 2000-2009, constructed by using the core National Socio-economic Survey (core Susenas). Our results support the Kuznets inverted-U hypothesis, whether the Gini coefficient or the Theil indices are used as a measure of inequality. According to our estimates, expenditure inequality would reach the peak at an urbanization rate of around 46-50%. Since the 2010 urbanization rate is 50%, this indicates that expenditure inequality has already attained the peak value. Thus, further urbanization would decrease expenditure inequality, but all other things being equal.
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Bibliographic InfoPaper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2013_20.
Length: 22 pages
Date of creation: Sep 2013
Date of revision:
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More information through EDIRC
urbanization; expenditure inequality; Kuznets hypothesis; panel data regression; Indonesia;
Other versions of this item:
- Perdamen Sagala & Takahiro Akita & Arief Anshory Yusuf, 2013. "Urbanization and Expenditure Inequality in Indonesia: Testing the Kuznets Hypothesis with Provincial Panel Data," Working Papers in Economics and Development Studies (WoPEDS) 201318, Department of Economics, Padjadjaran University, revised Oct 2013.
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-25 (All new papers)
- NEP-SEA-2013-10-25 (South East Asia)
- NEP-URE-2013-10-25 (Urban & Real Estate Economics)
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