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A causality test between income, inequality and poverty – empirical evidence from South-East Asia

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  • Jan Bentzen
  • Le Thanh Tung

Abstract

The income–inequality relationship is often addressed in the literature and studies also reporting significant effects between income and the various measures of inequality. An important question is whether there is not only correlation but also causality in the income–inequality nexus. For investigating the latter purpose, a Granger causality test based on out-of-sample forecast errors is applied with data from 2006 to 2018 for per capita real income, Gini coefficients and poverty rates for sixty-one provinces in Vietnam. In this case, there is not detected any significant effects from inequality (Gini) or the level of poverty rates to income – and likewise no evidence of the reverse causality.

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  • Jan Bentzen & Le Thanh Tung, 2021. "A causality test between income, inequality and poverty – empirical evidence from South-East Asia," Applied Economics Letters, Taylor & Francis Journals, vol. 28(19), pages 1682-1685, November.
    • Handle: RePEc:taf:apeclt:v:28:y:2021:i:19:p:1682-1685
    DOI: 10.1080/13504851.2020.1851642
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    Cited by:

    1. Jarle Aarstad & Olav A. Kvitastein, 2021. "Do Operating Profits Induce a Wage Premium Equally Shared among Employees Earning High or Low Incomes?," Economies, MDPI, vol. 9(2), pages 1-7, May.

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