The Economic Crisis and Regional Income Inequality in Indonesia
This paper estimates regional income inequality in Indonesia during 1993-1998 using a Theil index based upon district- level GDP and population data. The overall regional income inequality increased significantly over the 1993-1997 period (from 0.262 to 0.287), during which Indonesia achieved an annual average growth rate of more than 7%. According to the two-stage nested inequality decomposition analysis, the increase is due mostly to the increase in the within-province inequality component, especially in the provinces of Riau, Jakarta, West Java, and East Java. In 1997, the within-province inequality component accounted for about a half of overall regional income inequality. In terms of per capita GDP, the economic crisis caused the Indonesian economy to revert to the 1995 level. The impact was, however, very uneven across provinces and districts. The overall regional income inequality declined to 0.266 in 1998, which corresponded to the level prevailing in 1993-94. Contrary to the 1993-1997 period, about three-quarters of the decline was due to the decrease in the between-province inequality component, in which the Java-Bali region played a prominent role through a significant decrease in its between-province inequality. The economic crisis appears to have been a crisis afflicting urban Java and urban Sumatra.
|Date of creation:||Oct 2001|
|Contact details of provider:|| Postal: 777 Kokusai-cho, Minami Uonuma0-shi, Niigata 949-7277 JAPAN|
Web page: http://www.iuj.ac.jp/research/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
- Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
- Takahiro AKITA & Rizal Affandi LUKMAN & Yukino YAMADA, 1999. "Inequality In The Distribution Of Household Expenditures In Indonesia: A Theil Decomposition Analysis," The Developing Economies, Institute of Developing Economies, vol. 37(2), pages 197-221, June.
- Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
- Takahiro Akita, 2000. "Decomposing Regional Income Inequality Using Two-Stage Nested Theil Decomposition Method," Working Papers EMS_2000_02, Research Institute, International University of Japan.
When requesting a correction, please mention this item's handle: RePEc:iuj:wpaper:ems_2001_06. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kazumi Imai, Office of Academic Affairs)
If references are entirely missing, you can add them using this form.