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A Spatial Decomposition of Income Inequality in Chile

  • Dusan Paredes

    ()

    (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)

  • Victor Iturra

    ()

    (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)

  • Marcelo Lufin

    ()

    (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)

The previous literature identifies the high and persistent income inequality of Chile, but the geography of this inequality is still unexplored. To evaluate this dimension, we propose a three-stage decomposition of the Theil index at regional, province and county level. Our decomposition indicates that between 1992 and 2009, 21% of the inequality is attributable to these spatial scales. Inside of them, the highest inequality exists between counties and between regions, although they follow different patterns. The inequality between-counties fell from 65% to 53%. Oppositely, inequality between regions was 21% in 1992, and grew to 35% in 2009.

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File URL: https://sites.google.com/a/ucn.cl/wpeconomia/archivos/WP2012-11.pdf
File Function: First version, 2012
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Paper provided by Universidad Catolica del Norte, Chile, Department of Economics in its series Documentos de Trabajo en Economia y Ciencia Regional with number 25.

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Length: 33 pages
Date of creation: Aug 2012
Date of revision: Aug 2012
Handle: RePEc:cat:dtecon:dt201211
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  1. Sergio J. Rey, 2001. "Spatial Analysis of Regional Income Inequality," Urban/Regional 0110002, EconWPA.
  2. Zhang, Siao-Bo & Kanbur, Ravi, 1999. "What Difference Do Polarization Measures Make? An Application To China," Working Papers 7224, Cornell University, Department of Applied Economics and Management.
  3. Pierre-Philippe COMBES & Gilles DURANTON & Laurent GOBILLON, 2010. "The Identification of Agglomeration Economies," Working Papers 2010-52, Centre de Recherche en Economie et Statistique.
  4. Takahiro Akita, 2003. "Decomposing regional income inequality in China and Indonesia using two-stage nested Theil decomposition method," The Annals of Regional Science, Springer, vol. 37(1), pages 55-77, 02.
  5. Josef Novotný, 2007. "On the measurement of regional inequality: does spatial dimension of income inequality matter?," The Annals of Regional Science, Springer, vol. 41(3), pages 563-580, September.
  6. Dusan Paredes, 2011. "A methodology to compute regional housing price index using matching estimator methods," The Annals of Regional Science, Springer, vol. 46(1), pages 139-157, February.
  7. Anthony Shorrocks & Guanghua Wan, 2005. "Spatial decomposition of inequality," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 59-81, January.
  8. Gustafsson, Bjorn & Shi, Li, 2002. "Income inequality within and across counties in rural China 1988 and 1995," Journal of Development Economics, Elsevier, vol. 69(1), pages 179-204, October.
  9. Dante Contreras & Víctor Macías, 2002. "Desigualdad Educacional en Chile: Geografía y Dependencia," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 39(118), pages 395-421.
  10. Dusan Paredes & Víctor Iturra, 2011. "Substitution Bias and the Construction of a Spatial Cost of Living Index," Documentos de Trabajo en Economia y Ciencia Regional 13, Universidad Catolica del Norte, Chile, Department of Economics, revised May 2011.
  11. Dusan Paredes, 2012. "Alternative theories for explaining the spatial wage inequality: a multilevel competition among human capital, NEG and amenities," Documentos de Trabajo en Economia y Ciencia Regional 20, Universidad Catolica del Norte, Chile, Department of Economics, revised Apr 2012.
  12. Claudio Agostini & Phillip Brown, 2007. "Desigualdad geográfica en Chile," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines, vol. 22(1), pages 3-33, June.
  13. Ramírez, E. & Tartakowsky, A. & Modrego, F., 2009. "La importancia de la desigualdad geográfica en Chile," Working papers 030, Rimisp Latin American Center for Rural Development.
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