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The roles of location and education in the distribution of economic well-being in Indonesia: hierarchical and non-hierarchical inequality decomposition analyses

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Abstract

This paper analyzes the roles of location (rural and urban sectors) and education in the distribution of economic well-being in Indonesia by employing the hierarchical and non-hierarchical decomposition methods of the Theil indices. This is done by using household expenditure data from the national socio-economic survey (Susenas) in 2008. It shows that there are large expenditure disparities across education levels but that these are more pronounced in the urban sector than the rural sector. When there are differences in educational structure between the rural and urban sectors, the hierarchical decomposition method appears to offer a better approach than the non-hierarchical method.

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Notes

  1. The primary education group includes households whose heads have either no education, incomplete primary education or primary education. The secondary group consists of households whose heads completed junior high school or senior high school, whereas the tertiary group includes households whose heads completed two-year junior college, three-year junior college, four-year university/college, or graduate school (master’s or doctoral program).

  2. Except the Blinder-Oaxaca decomposition, all the results are weighted results based on sample weights.

  3. The paper presented only the decomposition results of the Theil \(T\), since the implications of the Theil \(L\) results are similar to those of the Theil \(T\) results. The Theil \(L \)results are available from the authors upon request.

  4. Regression results for the urban, rural and pooled models are given in Table 7 in the Appendix.

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Authors and Affiliations

  1. Graduate School of International Relations, International University of Japan, 777 Kokusai-cho, Minami Uonuma, Niigata, 949-7277, Japan

    Takahiro Akita

  2. College of Business, Rikkyo University, Tokyo, Japan

    Sachiko Miyata

Authors
  1. Takahiro Akita
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  2. Sachiko Miyata
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Correspondence to Takahiro Akita.

Additional information

Takahiro Akita is grateful to the Japan Society for the Promotion of Science for its financial support (Grant-in-Aid for Scientific Research No. 24530274). The authors thank anonymous referees for their helpful comments and suggestions.

Appendix

Appendix

See Tables 6, 7.

Table 6 Hierarchical vs. non-hierarchical decompositions of Theil T index education \(\Rightarrow \) location
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Table 7 Regression results for the Blinder-Oaxaca decomposition
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Akita, T., Miyata, S. The roles of location and education in the distribution of economic well-being in Indonesia: hierarchical and non-hierarchical inequality decomposition analyses. Lett Spat Resour Sci 6, 137–150 (2013). https://doi.org/10.1007/s12076-013-0093-8

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  • DOI: https://doi.org/10.1007/s12076-013-0093-8

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