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Understanding Differences in Household Expenditure Inequality Between India and Indonesia

In: What Drives Inequality?

Author

Listed:
  • Arip Muttaqien
  • Cathal O’Donoghue
  • Denisa Sologon

Abstract

Although they are neighbouring Asian countries with many similarities, India and Indonesia have different levels of household expenditure inequality. During the end of 2000s, the Gini coefficient of Indonesia was 9.1 percentage points larger than the Gini coefficient of India. To understand the determinants of this difference, this study decomposes it into the contribution of price effects, demographic effects and labour market structure effects. Differences in expenditure structures (price effects) and demographic characteristics are found to be the greatest contributors to the inequality gap across the two countries. The difference in the education distribution of household heads also has a positive and significant impact on the inequality gap. Differences in the labour market structure, on the other hand, turn out to be less important.

Suggested Citation

  • Arip Muttaqien & Cathal O’Donoghue & Denisa Sologon, 2019. "Understanding Differences in Household Expenditure Inequality Between India and Indonesia," Research on Economic Inequality, in: What Drives Inequality?, volume 27, pages 55-68, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:reinzz:s1049-258520190000027005
    DOI: 10.1108/S1049-258520190000027005
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    More about this item

    Keywords

    Expenditure distribution; inequality; microsimulation; decomposition; D3; D63; O53;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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