Panel Data Analysis of Ethnic Fractionalization, Ethnic Tension, Religious Tension, and the Gini Coefficient

Brandon Parsons () and Shahdad Naghshpour
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Brandon Parsons: Pepperdine University and The University of Southern Mississippi, United States
Shahdad Naghshpour: The University of Southern Mississippi, United States

Journal of Economic Development, 2023, vol. 48, issue 4, 19-37

Abstract: The study uses an unbalanced panel of 103 countries, with data from 1988 to 2018, to examine the relationship between ethnic fractionalization, ethnic tension, religious tension, and the Gini coefficient. The econometric model uses Driscoll and Kraay standard errors to account for heteroscedasticity, autocorrelation, and cross-sectional dependence. The data is categorized based on income levels and regional distinctions to identify and understand the varying patterns and trends across different groups. Religious tension is statistically significant in more cases than ethnic fractionalization or ethnic tension. Increases in religious tension worsen income distribution. Ethnic tension is significant only in the lowest tension categories in the full and non-OECD panels. Increases in ethnic fractionalization can either worsen or improve income distribution, depending on the panel. Findings indicate that cultural tension can exacerbate economic conditions, potentially driving the observed deterioration in income distribution.

Keywords: Income Inequality; Ethnic Fractionalization; Religious and Ethnic Tension (search for similar items in EconPapers)
JEL-codes: O10 (search for similar items in EconPapers)
Date: 2023
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