A further step to understand income inequality in Chile: A decomposition using three-stages nested Theil index decomposition method

Dusan Paredes, Victor Iturra and Marcelo Lufin

No 25, Documentos de Trabajo en Economia y Ciencia Regional from Universidad Catolica del Norte, Chile, Department of Economics

Abstract: The previous literature identifies the high and persistent income inequality of Chile, but the geography of this inequality is still unexplored. To evaluate this dimension, we propose a three-stage decomposition of the Theil index at regional, province and county level. Our decomposition indicates that between 1992 and 2009, 21% of the inequality is attributable to these spatial scales. Inside of them, the highest inequality exists between counties and between regions, although they follow different patterns. The inequality between-counties fell from 65% to 53%. Oppositely, inequality between regions was 21% in 1992, and grew to 35% in 2009.

Keywords: Three stage nested Theil index; spatial income inequality (search for similar items in EconPapers)
JEL-codes: C8 O15 O18 O21 O51 R11 R12 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012-08, Revised 2012-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cat:dtecon:dt201211

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