IDEAS home Printed from https://ideas.repec.org/a/taf/bindes/v49y2013i1p103-112.html
   My bibliography  Save this article

Towards a better measure of income inequality in Indonesia

Author

Listed:
  • Kunta Nugraha
  • Phil Lewis

Abstract

Indonesia has experienced significant economic growth in recent years (on average, 5% in 2000--08), but many people are still living in poverty. Income inequality, as measured by the official Gini coefficient, has also increased. This paper evaluates household income and income inequality in Indonesia, assessing both market and non-market income to reach a more accurate measure of how actual income affects living standards. We find that if household income considers non-market income, income distribution is significantly more balanced, the coefficient of income inequality falls from 0.41 to 0.21 and the income share of the population's poorest deciles increases more than fivefold. The results suggest that market income alone is a misleading measure of income distribution in Indonesia.

Suggested Citation

  • Kunta Nugraha & Phil Lewis, 2013. "Towards a better measure of income inequality in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 49(1), pages 103-112, April.
    • Handle: RePEc:taf:bindes:v:49:y:2013:i:1:p:103-112
    DOI: 10.1080/00074918.2013.772941
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00074918.2013.772941
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00074918.2013.772941?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leigh, Andrew & van der Eng, Pierre, 2009. "Inequality in Indonesia: What can we learn from top incomes?," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 209-212, February.
    2. Anthony Atkinson & Thomas Piketty, 2010. "Top Incomes : A Global Perspective," PSE-Ecole d'économie de Paris (Postprint) halshs-00754875, HAL.
    3. Abuzar Asra, 2000. "Poverty And Inequality In Indonesia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 5(1-2), pages 91-111.
    4. Gary Fields & Paul Cichello & Samuel Freije & Marta Menéndez & David Newhouse, 2003. "For Richer or for Poorer? Evidence from Indonesia, South Africa, Spain, and Venezuela," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(1), pages 67-99, April.
    5. Anne Booth, 2000. "Poverty and Inequality in The Soeharto Era: An Assessment," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 36(1), pages 73-104.
    6. de Ree, Joppe & Alessie, Rob & Pradhan, Menno, 2013. "The price and utility dependence of equivalence scales: Evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 97(C), pages 272-281.
    7. repec:dau:papers:123456789/1560 is not listed on IDEAS
    8. Ravallion, Martin & Dearden, Lorraine, 1988. "Social Security in a "Moral Economy": An Empirical Analysis for Java," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 36-44, February.
    9. Cameron, Lisa A., 2000. "Poverty and inequality in Java: examining the impact of the changing age, educational and industrial structure," Journal of Development Economics, Elsevier, vol. 62(1), pages 149-180, June.
    10. Kusnic, Michael W. & Davanzo, Julie, 1986. "Accounting for non-market activities in the distribution of income : An empirical investigation," Journal of Development Economics, Elsevier, vol. 21(2), pages 211-227, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Szczepaniak, Małgorzata & Geise, Andrzej & Bariyah, Nurul, 2022. "Impact of institutional determinants on income inequalities in Indonesia during the Era Reformasi," Journal of Asian Economics, Elsevier, vol. 82(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andy Sumner & Peter Edward, 2013. "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers in Economics and Development Studies (WoPEDS) 201310, Department of Economics, Padjadjaran University, revised Jun 2013.
    2. Mitsuhiro Hayashi & Mitsuhiko Kataoka & Takahiro Akita, 2014. "Expenditure Inequality in Indonesia, 2008–2010: A Spatial Decomposition Analysis and the Role of Education," Asian Economic Journal, East Asian Economic Association, vol. 28(4), pages 389-411, December.
    3. Takahiro Akita & Ni Made Inna Dariwardani, 2013. "Chronic and Transient Poverty in Indonesia: A Spatial Perspective with the 2008-2010 Susenas Panel Data," Working Papers EMS_2013_19, Research Institute, International University of Japan.
    4. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    5. Christoph Gorgas & Christoph A. Schaltegger, 2012. "The long run effect of taxes on the distribution of top income shares: an empirical investigation," CREMA Working Paper Series 2012-22, Center for Research in Economics, Management and the Arts (CREMA).
    6. Takahiro Akita & Alit Pirmansah, 2011. "Urban Inequality in Indonesia," Working Papers EMS_2011_04, Research Institute, International University of Japan.
    7. Andy Sumner, 2013. "The Evolution Of Education And Health Poverty During Economic Development:The Case Of Indonesia, 1991–2007," Working Papers in Economics and Development Studies (WoPEDS) 201311, Department of Economics, Padjadjaran University, revised May 2013.
    8. Christoph Lakner & Branko Milanovic, 2016. "Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession," The World Bank Economic Review, World Bank, vol. 30(2), pages 203-232.
    9. Perdamen Sagala & Takahiro Akita & Arief Yusuf, 2014. "Urbanization and expenditure inequality in Indonesia: testing the Kuznets hypothesis with provincial panel data," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 133-147, October.
    10. Pim De Zwart & Jan Luiten Van Zanden, 2015. "Editor's choice Labor, wages, and living standards in Java, 1680–1914," European Review of Economic History, European Historical Economics Society, vol. 19(3), pages 215-234.
    11. Christoph A. Schaltegger & Christoph Gorgas, 2011. "The Evolution of Top Incomes in Switzerland over the 20th Century," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(IV), pages 479-519, December.
    12. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    13. Atkinson, Tony & Leigh, Andrew, 2010. "The Distribution of Top Incomes in Five Anglo-Saxon Countries over the Twentieth Century," IZA Discussion Papers 4937, Institute of Labor Economics (IZA).
    14. Enrico Rubolino & Daniel Waldenström, 2019. "Trends and gradients in top tax elasticities: cross-country evidence, 1900–2014," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(3), pages 457-485, June.
    15. Brzezinski, Michal, 2013. "Asymptotic and bootstrap inference for top income shares," Economics Letters, Elsevier, vol. 120(1), pages 10-13.
    16. Christoph Lakner & Branko Milanovic, 2015. "La distribución global del ingreso. De la caída del muro de Berlín a la gran recesión," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 17(32), pages 71-128, January-J.
    17. Williamson, Jeffrey G., 2017. "Philippine Inequality across the Twentieth Century: Slim Evidence but Fat Questions," CEPR Discussion Papers 12481, C.E.P.R. Discussion Papers.
    18. F. Clementi & A. L. Dabalen & V. Molini & F. Schettino, 2020. "We forgot the middle class! Inequality underestimation in a changing Sub-Saharan Africa," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 45-70, March.
    19. Yessi Vadila & Budy P. Resosudarmo, 2020. "Tariff reform and income inequality in Indonesia," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 455-475, June.
    20. Ahmad Rifa?i, 2010. "Urban poverty: Evidence from Lampung Province," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 2(3), pages 317-327, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:bindes:v:49:y:2013:i:1:p:103-112. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CBIE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.