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Income Inequality in Rural India: Decomposing the Gini by Income Sources


  • Mehtabul Azam

    () (World Bank and IZA)

  • Abusaleh Shariff

    () (National Council of Applied Economic Research)


This paper examines income inequality in rural India in 1993 and 2005. It attempts to ascertain the contribution of different income sources to overall income inequality, and change in their relative importance between 1993 and 2005 through decomposition of Gini coefficient. The paper finds that income inequality has increased between 1993 and 2005. Agriculture income continues to contribute majorly in total income and income inequality; however its share in total income and total income inequality has declined significantly. A marginal increase in agriculture and salaried income leads to increase in inequality; however, a marginal increase in labor income (both agriculture and non-agriculture) lead to reduction in the income inequality.

Suggested Citation

  • Mehtabul Azam & Abusaleh Shariff, 2011. "Income Inequality in Rural India: Decomposing the Gini by Income Sources," Economics Bulletin, AccessEcon, vol. 31(1), pages 739-748.
  • Handle: RePEc:ebl:ecbull:eb-10-00460

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    Cited by:

    1. Hazarika, Bhabesh, 2017. "Decomposition of Gender Income Gap in Rural Informal Micro-enterprises: An Unconditional Quantile Approach in the Handloom Industry," Working Papers 17/216, National Institute of Public Finance and Policy.
    2. Singh, K.M. & Kumar, Abhay & Singh, R.K.P. & Meena, M.S. & Kumar, Anjani, 2012. "Dynamics of income in Bihar: evidence from village studies," MPRA Paper 44821, University Library of Munich, Germany, revised 15 Nov 2012.
    3. repec:spr:jqecon:v:15:y:2017:i:2:d:10.1007_s40953-016-0057-0 is not listed on IDEAS
    4. Singh, K.M. & Meena, M.S. & Singh, R.K.P. & Kumar, Abhay & Kumar, Anjani, 2012. "Dynamics of income in Jharkhand: evidences from village studies," MPRA Paper 44822, University Library of Munich, Germany, revised 15 Nov 2012.
    5. Abhimanyu Dadu & Namrata Gulati, 2014. "Inequality, neighborhoods and variation in prices," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-001, Indira Gandhi Institute of Development Research, Mumbai, India.
    6. Namrata Gulati & Abhimanyu Dadu, 2014. "Inequality, Neighbourhoods and Variation in Prices," Economics Bulletin, AccessEcon, vol. 34(3), pages 1463-1484.
    7. Reddy, A. Bheemeshwar, 2015. "Changes in Intergenerational Occupational Mobility in India: Evidence from National Sample Surveys, 1983–2012," World Development, Elsevier, vol. 76(C), pages 329-343.
    8. Mehtabul Azam, 2016. "Income Inequality in India 2004-2012: Role of Alternative Income sources," Economics Bulletin, AccessEcon, vol. 36(2), pages 1160-1169.

    More about this item


    Gini decomposition; income inequality; income sources; India;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty


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