Statistical Test of the Regional Income Inequality in Korea

The paper estimates Korean gini coefficients of non-agricultural household income distribution for 16 provincial-level administrative regions and the nation by using public use micro data of National Survey of Household Income and Expenditures in 1996 and 2000, and tests hypotheses about changes of gini coefficients between the two time periods and across regions in 2000. The standard error of the gini index is estimated by jackknife and bootstrap methods rather than the traditional delta method because of the complexity of the latter. National gini coefficient of household current income increased by 23% from 0.3257 in 1996 to 0.3934 in 2000, while changes in regional gini indices ranged from -1.7% for Jeju to +35.6% for Geonggi-do. But, the changes in gini index are not statistically significant at 10% significance level in three regions: Jeju(-1.7% from 0.3730 to 0.3667), Busan(0.74% from 0.3799 to 0.3827) and Jeonnam( 4.99% from 0.3949 to 0.4146). Regional gini indices of household total income in 2000 ranged from 0.3442 in Ulsan to 0.4528 in Gyeongbuk, but those of similar magnitude are not statistically significant. For example, Busan��s income inequality(0.3852) does not differ significantly from 10 regions including Incheon(0.3614) to Daejeon(0.4107).