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On the re-assessment of inequality in Indonesia: household survey or national account?

Arief Yusuf ()

No 200605, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University

Abstract: This paper is motivated by the inconsistency between food and non-food expenditure estimated from household survey data (SUSENAS) and from nationalaccount (I-O table) and its connection on the issue of inequality in Indonesia.Since non-food expenditure tend to be under-estimated when compared withnational account data, it imply the under-representation of the rich in the cal-culation of inequality in Indonesia. This paper, then applies an approach toreconciling household survey and national accounts data, by re-estimating thesampling weight through minimization of entropy distance of information takinghousehold survey weight as prior, while satisfying some aggregation constraints.The estimated weight then is used to calculate standard indicator of inequalityin Indonesia. The results suggests that while inequality in rural Indonesia doesnot change much, due to possible under- representation of the rich in the survey, inequality in urban Indonesia is highly under-estimated. The "Jakarta factor"seems to account mostly to this discrepancy.

Keywords: inequality; Indonesia; entropy (search for similar items in EconPapers)
JEL-codes: C80 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dev and nep-sea
Date: 2006-08, Revised 2006-08
References: View references in EconPapers View complete reference list from CitEc
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http://ceds.feb.unpad.ac.id/wopeds/200605.pdf First version, 2006 (application/pdf)

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