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A Spatial Analysis of Poverty and Income Inequality in the Appalachian Region

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  • Sudishka Joshi

    ()
    (Division of Resource Management, West Virginia University)

  • Tesfa Gebremedhin

    ()
    (Division of Resource Management, West Virginia University)

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    Abstract

    The Appalachian Region has made progress in the various measures of development but still lags behind other national counterparts. Understanding the relationship between poverty and income inequality is important to evaluate how a development strategy would benefit the region. This paper presents a spatial simultaneous equations approach to determine the relationship between poverty and income inequality. Cross sectional county level data from 1990 and 2000 for the 420 counties in the Appalachian Region are used to examine the determinants of poverty and income inequality. The empirical results suggest that poverty and income inequality are inversely related. If the policy objective is to alleviate poverty, then considering reducing income inequality at the same time, may prove to render ineffective conclusions. The result findings also suggest that the income inequality in the Appalachian Region may actually contribute to its economic growth and to poverty reduction in the Region.

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    File URL: http://rri.wvu.edu/wp-content/uploads/2012/11/Gebremedhin_A_Spatial_Analysis_of_Poverty.pdf
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    Bibliographic Info

    Paper provided by Regional Research Institute, West Virginia University in its series Working Papers with number 201015.

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    Length: 19 pages
    Date of creation: 2010
    Date of revision:
    Handle: RePEc:rri:wpaper:201015

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    Web page: http://rri.wvu.edu/research/working-papers/
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    Related research

    Keywords: poverty rate; income inequality; gini coefficient; spatial durbin model;

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    1. de Janvry, Alain & Sadoulet, Elisabeth, 2000. "Growth, Poverty, and Inequality in Latin America: A Causal Analysis, 1970-94," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 267-87, September.
    2. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Policy Research Working Paper Series 1775, The World Bank.
    3. Timothy Smeeding, 2006. "Poor People in Rich Nations: The United States in Comparative Perspective," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 69-90, Winter.
    4. Daniel Suryadarma & Rima Prama Artha & Asep Suryahadi & Sudarno Sumarto, 2005. "A Reassessment of Inequality and Its Role in Poverty Reduction in Indonesia," Development Economics Working Papers 22543, East Asian Bureau of Economic Research.
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