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The measurement of inequality in Fiji's household income distribution: Some empirical results


  • Rukmani Gounder
  • Zhongwei Xing


Purpose - Measures of inequality determine the effectiveness of social and economic policies aimed at reducing inequality and to design effective intervention policies. The purpose of this paper is to focus on poverty reduction and welfare improving impacts of reducing income inequality in the case of Fiji. Using Fiji's Household Income and Expenditure Survey 2002-2003, a comprehensive analysis is used to measure the level of inequality by household income, quintile income distribution, decomposition of inequality by ethnicity and regional groups, and the household income inequality by source of income. Design/methodology/approach - Several statistical techniques have been applied to investigate the degree of inequality in the household income. These include the Gini coefficient, the Nelson ratio, the concentration index and the Atkinson index. An evaluation by ethnicity, regions and household income sources reflects the level of inequality, and concerns for policies and governance. Findings - The results show that urban households, in particular, experience greater inequalities, in both positive and normative terms. The Indo-Fijian households experience greater income inequalities than the Fijian households. Decomposition results for the separate factor income components also indicate major sources of inequality. These findings clearly establish that Fiji still has a long way to go in reducing the income gaps between the rich and the poor in both rural and urban households. Originality/value - The paper is a first study that estimates various measures of inequality in the case of Fiji. The implication of the empirical findings suggests that Fiji is unlikely to achieve its Millennium Development Goal of halving poverty rate by 2015 due to the large income differentials by ethnicity and in the urban-rural areas.

Suggested Citation

  • Rukmani Gounder & Zhongwei Xing, 2012. "The measurement of inequality in Fiji's household income distribution: Some empirical results," International Journal of Social Economics, Emerald Group Publishing, vol. 39(4), pages 264-280, March.
  • Handle: RePEc:eme:ijsepp:v:39:y:2012:i:4:p:264-280

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    References listed on IDEAS

    1. Lars Osberg, 1998. "Economic Insecurity," Discussion Papers 0088, University of New South Wales, Social Policy Research Centre.
    2. Rukmani Gounder, 2005. "Neglected dimensions of development: inequality, conflict and aid," International Journal of Social Economics, Emerald Group Publishing, vol. 32(1/2), pages 60-76, January.
    3. Frank A. Cowell, 1985. "Measures of Distributional Change: An Axiomatic Approach," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 135-151.
    4. Kakwani, N C & Podder, N, 1973. "On the Estimation of Lorenz Curves from Grouped Observations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 278-292, June.
    5. Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, vol. 52(6), pages 1369-1385, November.
    6. Kakwani, Nanak C & Podder, N, 1976. "Efficient Estimation of the Lorenz Curve and Associated Inequality Measures from Grouped Observations," Econometrica, Econometric Society, vol. 44(1), pages 137-148, January.
    7. Gastwirth, Joseph L, 1972. "The Estimation of the Lorenz Curve and Gini Index," The Review of Economics and Statistics, MIT Press, vol. 54(3), pages 306-316, August.
    8. Graham Pyatt & Chau-nan Chen & John Fei, 1980. "The Distribution of Income by Factor Components," The Quarterly Journal of Economics, Oxford University Press, vol. 95(3), pages 451-473.
    9. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    10. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    11. Campano, Fred & Salvatore, Dominick, 2006. "Income Distribution," OUP Catalogue, Oxford University Press, number 9780195300918.
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