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Spatial Dimensions of Expenditure Inequality and the Role of Education in Indonesia: An Analysis of the 2008-2010 Susenas Panel Data

  • Mitsuhiro Hayashi
  • Mitsuhiko Kataoka
  • Takahiro Akita

Based on 2008-2010 Susenas panel data, this study analyzes expenditure inequality in Indonesia from spatial perspectives by using several inequality decomposition methods: decomposition of the Theil indices by population subgroups; decomposition of the Gini coefficient by expenditure components; and the Blinder-Oaxaca decomposition. In the Theil decomposition, this study employs not only the conventional approach but also an alternative approach proposed by Elbers and others (2008). Our results show that a substantial portion of expenditure inequality is attributed to inequalities within urban and rural sectors. According to the alternative approach, however, the contribution of between-sector inequality increases conspicuously, suggesting that there are notable differences in the distribution of per capita household expenditures between the urban and rural sectors. Educational differences appear to have played an important role in urban inequality as well as urban-rural disparity. For both urban and rural households, expenditures on non-food items, including expenditure on education, serve to have increased total inequality.

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Paper provided by Crawford School of Public Policy, The Australian National University in its series Crawford School Research Papers with number 1211.

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Length: 35 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:een:crwfrp:1211
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