Trade Liberalization and Income Inequality in India: A Poisson Distributed-Lag Analysis

Vertica Agarwal, Jean Paelinck, Kenneth Reinert () and Roger R. Stough

Applied Econometrics and International Development, 2008, vol. 8, issue 2, 187-192

Abstract: This paper addresses the relationship between trade liberalization and income inequality among Indian states using a Poisson distributed-lag analysis. Two measures of income inequality are considered: the Gini coefficient and the coefficient of variation. Trade liberalization is proxied using export growth. Results indicate that there is a different pattern of responses in inequality to export growth between rural and urban households. Rural inequality tends to be more responsive in the hoped-for direction than urban inequality.

Date: 2008
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