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Income Inequality in East Java

In: Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2)

Author

Listed:
  • Nova Dwi Ise Aprelia

    (Universitas Muhammadiyah Surakarta, Faculty of Economics and Business)

  • Muhammad Arif

    (Universitas Muhammadiyah Surakarta, Faculty of Economics and Business)

Abstract

The goal of this study is to determine the direction and strength of the relationship between local original income, purchasing power parity, dependency ratio, construction cost index, and the number of impoverished people, and how these variables relate to income inequality across all East Java province residences. In this study, 2017–2021 secondary data are used. The Central Statistics Agency (BPS), the Directorate General of Fiscal Balance, provided the information (DJPK, Ministry of Finance). Theil Entropy Index approach is the analytical technique used to compute income inequality, and panel data regression analysis is the estimate model. Income inequality is the dependent variable in this study, whereas local revenue, purchasing power parity, dependence ratio, construction cost index, and the number of impoverished people are the independent factors. The Random Effect Model (REM), one of the findings from the panel data regression analysis, was chosen as the best method to describe how independent variables affected dependent variables in this study. According to the influence validity test (t test), the variables regional original income, dependency ratio, and construction expensiveness index significantly affect income inequality in East Java province between 2017 and 2021, whereas the variables purchasing power parity and the number of impoverished people have no bearing on it.

Suggested Citation

  • Nova Dwi Ise Aprelia & Muhammad Arif, 2024. "Income Inequality in East Java," Advances in Economics, Business and Management Research, in: Huda Maulana & Muhammad Sholahuddin & Muhammad Anas & Zulfikar Zulfikar (ed.), Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2), pages 563-579, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-204-0_48
    DOI: 10.2991/978-94-6463-204-0_48
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