Regional income inequality, tourism, infrastructure and education :: A case of Indonesia

RAHAYU, Diah Puspita, Jinhwan Oh

2010 | Tesis | S2 Magister Ekonomika Pembangunan

This study analyzes regional income inequality and socioeconomic indicators of Indonesia during the period from 2002 to 2006 in 26 provinces, classified into five regions: Sumatra, Java-Bali, Kalimantan, Sulawesi, and others. Theil’s inequality and Theil’s decomposition index are used to examine income inequality. Further, this study employs Least Square Dummy Variable Test (LSDVT). Using tourism, infrastructure, and education as independent variables, this thesis analyzes the impact of socioeconomic indicators on Indonesia’s regional inequality. The analysis of Theil’s index shows that the overall income inequality in Indonesia has decreased during the period of 2002–2006. On the other hand, the decomposed inequality between the five regions has been fluctuating. The LSDVT results indicate that infrastructure decreases inequality significantly. However, tourism and education do not influence the inequality.

Kata Kunci : Regional income inequality,Theil index,Decomposition,Tourism,Indonesia