Template-type: ReDIF-Paper 1.0
Author-Name: Takahiro Akita
Author-Name-First: Takahiro
Author-Name-Last: Akita
Author-Email: akita@iuj.ac.jp
Author-Workplace-Name: International University of University
Author-Workplace-Homepage: http://www.iuj.ac.jp/
Title: Decomposing Regional Income Inequality Using Two-Stage Nested Theil Decomposition Method
Abstract: The objective of this paper is to present an inequality decomposition method, the two-stage nested Theil decomposition method, which is an extension of the ordinary one-stage Theil decomposition method. The method is analogous to a two-stage nested design in the analysis of variance (ANOVA). It considers the three-level hierarchical structure of a country: region-province-district, and decomposes the overall regional inequality, as measured by Theil indices based on district-level mean incomes, into three components: the between-region, between-province, and within-province inequality components. The within-province component is a weighted-average of within-province income inequalities for each province, while the between-province component is a weighted-average of between-province income inequalities within each region. The method uses districts as a basic regional unit to measure regional income inequality, rather than provinces, and thus can analyze the contribution of within-province inequalities as well as between-province and between-region inequalities to the overall regional income inequality in a coherent framework. This paper applies this two-stage nested Theil decomposition method to district-level income and population data in China and Indonesia and explores the factors of regional income inequality in China and Indonesia.
Classification-JEL: 
Length: 34 pages
Creation-Date: 2000-06
Number: EMS_2000_02
File-URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2000_02.pdf
File-Format: Application/pdf
File-Function: First version, 2000
File-Size: 100KB
Keywords: 
Handle: RePEc:iuj:wpaper:EMS_2000_02