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Regional income inequality in China and Indonesia: A comparative analysis

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  • Akita, Takahiro
  • Kawamura, Kazumi

Abstract

This study examines the extent and trends of regional income inequality in China and Indonesia, and performs a comparative analysis between these two countries in terms of factors determining regional income inequality. There are a number of studies that have analyzed the relationship between economic development and regional income inequality in China and Indonesia. However, most previous studies employed provincial income and population data to measure regional income inequality and were thus unable to measure inequality within provinces. In order to rectify this drawback, we will use district-level income and population data, rather than provincial data, to measure regional income inequality, and examine not only between-province inequalities but also within-province inequalities by using the two-stage nested Theil decomposition method developed by Akita (2002). China and Indonesia are still at a relatively early stage of economic development; therefore, income-enhancing economic activities tend to have concentrated in a few districts in each province to enjoy agglomeration economies. We will show that a very large regional income inequality exists among the districts of China and Indonesia. This study will also conduct a regression analysis to explore possible determinants of within-province income inequality, in which the following variables are considered: foreign direct investment, economic dualism, and migration.

Suggested Citation

  • Akita, Takahiro & Kawamura, Kazumi, 2002. "Regional income inequality in China and Indonesia: A comparative analysis," ERSA conference papers ersa02p432, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa02p432
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    References listed on IDEAS

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    1. 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.
    2. Jorge Garcia Garcia & Lana Soelistianingsih, 1998. "Why Do Differences in Provincial Incomes Persist in Indonesia?," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 34(1), pages 95-120.
    3. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    4. Mitsuhiko Kataoka & Takahiro Akita, 2003. "Regional Income Inequality in the Post-War Japan," ERSA conference papers ersa03p480, European Regional Science Association.
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    Cited by:

    1. Diao, Xinshen & Fan, Shenggen & Yu, Bingxin & Kanyarukiga, Sam, 2007. "Agricultural growth and investment options for poverty reduction in Rwanda," IFPRI discussion papers 689, International Food Policy Research Institute (IFPRI).
    2. Muhammad Refqi & Achmad Kemal Hidayat, 2019. "Determinants of Regional Disparities in Indonesia : Lessons from Provincial Level," Working Papers in Economics and Development Studies (WoPEDS) 201906, Department of Economics, Padjadjaran University, revised Dec 2019.
    3. Irwan Trinugroho & Agusman Agusman & Mochammad Doddy Ariefianto & Darsono Darsono & Amine Tarazi, 2015. "Determinants of cross regional disparity in financial deepening: Evidence from Indonesian provinces," Economics Bulletin, AccessEcon, vol. 35(2), pages 896-910.
    4. Branko Milanovic, 2004. "Half a World: Regional inequality in five great federations," Urban/Regional 0404002, University Library of Munich, Germany.
    5. Mitsuhiko Kataoka, 2022. "Cyclical shocks and spatial association of Indonesia's district‐level per capita income," Asian Economic Journal, East Asian Economic Association, vol. 36(3), pages 261-287, September.
    6. Szczepaniak, Małgorzata & Geise, Andrzej & Bariyah, Nurul, 2022. "Impact of institutional determinants on income inequalities in Indonesia during the Era Reformasi," Journal of Asian Economics, Elsevier, vol. 82(C).

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