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

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Abstract

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.

Suggested Citation

  • Mitsuhiro Hayashi & Mitsuhiko Kataoka & Takahiro Akita, 2012. "Spatial Dimensions of Expenditure Inequality and the Role of Education in Indonesia: An Analysis of the 2008-2010 Susenas Panel," Working Papers EMS_2012_21, Research Institute, International University of Japan.
  • Handle: RePEc:iuj:wpaper:ems_2012_21
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    File URL: http://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2012_21.pdf
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    References listed on IDEAS

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    1. Takahiro Akita & Puji Agus Kurniawan & Sachiko Miyata, 2011. "Structural Changes and Regional Income Inequality in Indonesia: A Bidimensional Decomposition Analysis," Asian Economic Journal, East Asian Economic Association, vol. 25(1), pages 55-77, March.
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    4. B. Raksaka Mahi & Suahasil Nazara, 2012. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 48(1), pages 7-31, April.
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    6. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
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    Keywords

    Income Indonesia; spatial inequality; decomposition of Theil indices and Gini coefficient; Blinder-Oaxaca decomposition; education; contribution of between-group inequality;

    JEL classification:

    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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