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Urbanization and expenditure inequality in Indonesia: testing the Kuznets hypothesis with provincial panel data

Perdamen Sagala (), Takahiro Akita () and Arief Yusuf ()

Letters in Spatial and Resource Sciences, 2014, vol. 7, issue 3, 133-147

Abstract: Focusing on Indonesia, this study analyzes the relationship between inequality and the process of urbanization. It performs a panel data regression analysis to test the Kuznets inverted-U hypothesis for urbanization based on a provincial panel data set of 33 provinces over the period 2000–2009, constructed by using the core National Socio-economic Survey (core Susenas). Our results support the Kuznets inverted-U hypothesis, whether the Gini coefficient or the Theil indices are used as a measure of inequality. According to our estimates, expenditure inequality would reach the peak at an urbanization rate of around 46–50 %. Since the 2010 urbanization rate is 50 %, this indicates that expenditure inequality has already attained the peak value. Thus, further urbanization would decrease expenditure inequality, but all other things being equal. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Urbanization; Expenditure inequality; Kuznets hypothesis; Panel data regression; Indonesia; O18; R11 (search for similar items in EconPapers)
Date: 2014
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Related works:
Working Paper: Urbanization and Expenditure Inequality in Indonesia: Testing the Kuznets Hypothesis with Provincial Panel Data (2016) Downloads
Working Paper: Urbanization and Expenditure Inequality in Indonesia: Testing the Kuznets Hypothesis with Provincial Panel Data (2013) Downloads
Working Paper: Urbanization and Expenditure Inequality in Indonesia: Testing the Kuznets Hypothesis with Provincial Panel Data (2013) Downloads
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DOI: 10.1007/s12076-013-0106-7

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