Advertisement

Social Indicators Research

, Volume 141, Issue 1, pp 245–273 | Cite as

The Role of Neighborhood in the Analysis of Spatial Economic Inequality

  • Miguel A. MárquezEmail author
  • Elena Lasarte
  • Marcelo Lufin
Original Research

Abstract

Spatial inequality measures should take into account the geographical position of the data of reference if the focus is on the spatial aspects of territorial inequality. However, these traditional spatial inequality measures like the Theil index do not distinguish among different locational situations. On the other hand, when analyzing the spatial decomposition of inequality, it is usual to express global inequality as a weighted sum of inequality values calculated for population subgroups (within component) plus the contribution arising out of differences among subgroup means (between component). Nevertheless, it is unclear whether the reported within and between contributions have been driven primarily by specific factors related to the spatial level of research or by neighborhood factors. The present paper has two main objectives. The first consists into propose a simple way to measure the role of the geographical position in economic inequality. The second aim is to provide an approach to decompose global inequality into its within-country and between-country components assessing which part of these components could be related to neighborhood factors. The proposals are illustrated for the case of European countries. Inequality within each of the countries and inequality between countries can be filtered of neighborhood components, showing inequality components related to specific (local) factors. For a considered spatial level, this exploratory approach can highlight the relevance of future place-based policies versus policies able to support and promote regional neighborhoods.

Keywords

Inequality decomposition Between–within decomposition Interregional inequality 

JEL Classification

C43 C10 R1 R12 

Notes

Acknowledgements

We thank the editor and two anonymous referees for their comments. Miguel A. Márquez acknowledges financial support from the Spanish Ministry of Economy, Industry and Competitiveness (Grant ECO2016-78352-P).

References

  1. Aguiar, M., & Bils, M. (2015). Has consumption inequality mirrored income inequality? The American Economic Review, 105(9), 2725–2756.CrossRefGoogle Scholar
  2. Akita, T. (2003). Decomposing regional income inequality in China and Indonesia using two-stage nested Theil decomposition method. The Annals of Regional Science, 37, 55–77.CrossRefGoogle Scholar
  3. Anand, S. (1983). Inequality and poverty in Malaysia: Measurement and decomposition. A World Bank Research Publication. New York: Oxford University Press.Google Scholar
  4. Arbia, G. (2001). The role of spatial effects in the empirical analysis of regional concentration. Journal of Geographical Systems, 3(3), 271–281.CrossRefGoogle Scholar
  5. Arbia, G., & Piras, G. (2009). A new class of spatial concentration measures. Computational Statistics & Data Analysis, 53(12), 4471–4481.CrossRefGoogle Scholar
  6. Barca, F. (2009). An agenda for a reformed cohesion policy: A place based approach to meeting European Union Challenges and Expectations. Independent report prepared at the request of Danuta Hübner, Commissioner for Regional Policy, Brussels.Google Scholar
  7. Bickenbach, F., & Bode, E. (2008). Disproportionality measures of concentration, specialization, and localization. International Regional Science Review, 31(4), 359–388.CrossRefGoogle Scholar
  8. Blank, R. M. (2011). Changing inequality. Berkeley: University of California Press.CrossRefGoogle Scholar
  9. Bourguignon, F. (1979). Decomposable income inequality measures. Econometrica, Journal of the Econometric Society, 47(4), 901–920.CrossRefGoogle Scholar
  10. Bourguignon, F., & Morrison, C. (2002). Inequality among world citizens: 1820–1992. American Economic Review, 92(4), 727–744.CrossRefGoogle Scholar
  11. Camagni, R. (2002). On the concept of territorial competitiveness: Sound or misleading? Urban Studies, 39(13), 2395–2411.CrossRefGoogle Scholar
  12. Chakravarty, S. R. (2001). The variance as a subgroup decomposable measure of inequality. Social Indicators Research, 53(1), 79–95.CrossRefGoogle Scholar
  13. Chen, K. M., & Wang, T. M. (2015). Determinants of poverty status in Taiwan: A multilevel approach. Social Indicators Research, 123(2), 371–389.CrossRefGoogle Scholar
  14. Chongvilaivan, A., & Kim, J. (2016). Individual income inequality and its drivers in Indonesia: A Theil decomposition reassessment. Social Indicators Research, 126(1), 79–98.CrossRefGoogle Scholar
  15. Cowell, F. A. (2011). Measuring inequality (5th ed.). New York: Oxford University Press.CrossRefGoogle Scholar
  16. De Dominicis, L. (2014). Inequality and growth in European regions: Towards a place-based approach. Spatial Economic Analysis, 9(2), 120–141.CrossRefGoogle Scholar
  17. Deltas, G. (2003). The small-sample bias of the Gini coefficient: Results and implications for empirical research. The Review of Economics and Statistics, 85(1), 226–234.CrossRefGoogle Scholar
  18. Deutsch, J., & Silber, J. (1999). Inequality decomposition by population subgroups and the analysis of interdistributional inequality. In J. Silber (Ed.), Handbook of income inequality measurement (pp. 363–397). Boston: Kluwer Academic Publishers.CrossRefGoogle Scholar
  19. Di Berardino, C., Mauro, G., Quaglione, D., & Sarra, A. (2016). Industrial districts and socio-economic well-being: An investigation on the Italian provinces disparities. Social Indicators Research, 129(1), 337–363.CrossRefGoogle Scholar
  20. Doran, J., & Jordan, D. (2013). Decomposing European NUTS2 regional inequality from 1980 to 2009: National and European policy implications. Journal of Economic Studies, 40(1), 22–38.CrossRefGoogle Scholar
  21. Doran, J., & Jordan, D. (2016). Decomposing US regional income inequality from 1969 to 2009. Applied Economics Letters, 23(11), 781–784.CrossRefGoogle Scholar
  22. Fishlow, A. (1972). Brazilian size distribution of income. The American Economic Review, 62(1/2), 391–402.Google Scholar
  23. Fredriksen, K. B. (2012). Income inequality in the European Union. OECD Economics Department Working Papers, No. 952, OECD Publishing.  https://doi.org/10.1787/5k9bdt47q5zt-en.
  24. Glaeser, E. L., & Gottlieb, J. D. (2008). The economics of place-making policies. Brookings Papers on Economic Activity, 2, 155–239.CrossRefGoogle Scholar
  25. Goda, T., & Torres García, A. (2017). The rising tide of absolute global income inequality during 1850–2010: Is it driven by inequality within or between countries? Social Indicators Research.  https://doi.org/10.1007/s11205-015-1222-0.CrossRefGoogle Scholar
  26. Goerlich-Gisbert, F. J. (2001). On factor decomposition of cross-country income inequality: Some extensions and qualifications. Economics Letters, 70(3), 303–309.CrossRefGoogle Scholar
  27. Guimarães, P., Figueiredo, O., & Woodward, D. (2011). Accounting for neighboring effects in measures of spatial concentration. Journal of Regional Science, 51(4), 678–693.CrossRefGoogle Scholar
  28. Haughton, J., & Khandker, S. R. (2009). Handbook on poverty + inequality. Washington: World Bank Publications.Google Scholar
  29. Huggins, R., & Clifton, N. (2011). Competitiveness, creativity, and place-based development. Environment and Planning A, 43(6), 1341–1362.CrossRefGoogle Scholar
  30. Kuznets, S. (1955). Economic growth and income inequality. The American Economic Review, 45(1), 1–28.Google Scholar
  31. Márquez, M. A., Lasarte-Navamuel, E., & Lufin, M. (2016). Isolating neighborhood components of regional inequality illustration for the Spanish case. International Regional Science Review.  https://doi.org/10.1177/0160017616665670.CrossRefGoogle Scholar
  32. McCann, P., & Ortega-Argilés, R. (2016). Smart specialisation: Insights from the EU experience and implications for other economies. Journal of Regional Research, 36, 279–293.Google Scholar
  33. Milanovic, B. (2013). Global income inequality in numbers: In history and now. Global Policy, 4(2), 198–208.CrossRefGoogle Scholar
  34. Milanovic, B. (2015). Global inequality of opportunity: How much of our income is determined by where we live? The Review of Economics and Statistics, 97(2), 452–460.CrossRefGoogle Scholar
  35. Modrego, F., & Berdegué, J. A. (2015). A large-scale mapping of territorial development dynamics in Latin America. World Development, 73, 11–31.CrossRefGoogle Scholar
  36. Moser, M., & Schnetzer, M. (2017). The income–inequality nexus in a developed country: Small-scale regional evidence from Austria. Regional Studies, 51(3), 454–466.CrossRefGoogle Scholar
  37. Mussini, M. (2017). Decomposing changes in inequality and welfare between EU regions: the roles of population change, re-ranking and income growth. Social Indicators Research, 130(2), 455–478.CrossRefGoogle Scholar
  38. Novotný, J. (2007). On the measurement of regional inequality: Does spatial dimension of income inequality matter? The Annals of Regional Science, 41(3), 563–580.CrossRefGoogle Scholar
  39. Novotny, J., & Nosek, V. (2012). Comparison of regional inequality in unemployment among four Central European countries: An inferential approach. Letters in Spatial and Resource Sciences, 5, 95–101.CrossRefGoogle Scholar
  40. OECD. (2003). Measuring regional economies. Statistics Brief, October, no 6, Organisation for Economic Co-operation and Development, Paris.Google Scholar
  41. Openshaw, S. (1984). The modifiable areal unit problem. Norwick: Geobooks.Google Scholar
  42. Paredes, D., Iturra, V., & Lufin, M. (2016). A spatial decomposition of income inequality in Chile. Regional Studies, 50(5), 771–789.CrossRefGoogle Scholar
  43. Partridge, M. D., Rickman, D. S., Olfert, M. R., & Tan, Y. (2015). When spatial equilibrium fails: Is place-based policy second best? Regional Studies, 49(8), 1303–1325.CrossRefGoogle Scholar
  44. Pike, A., Rodríguez-Pose, A., & Tomaney, J. (2017). Shifting horizons in local and regional development. Regional Studies, 51(1), 46–57.CrossRefGoogle Scholar
  45. Quadrado, L., Heijman, W., & Folmer, H. (2001). Multidimensional analysis of regional inequality: The case of Hungary. Social Indicators Research, 56(1), 21–42.CrossRefGoogle Scholar
  46. Rey, S. J., & Smith, R. J. (2013). A spatial decomposition of the Gini coefficient. Letters in Spatial and Resource Sciences, 6(2), 55–70.CrossRefGoogle Scholar
  47. Sala-i-Martin, X. (2006). The world distribution of income: falling poverty and… convergence, period. The Quarterly Journal of Economics, 121(2), 351–397.CrossRefGoogle Scholar
  48. Seshanna, S., & Decornez, S. (2003). Income polarization and inequality across countries: An empirical study. Journal of Policy Modeling, 25(4), 335–358.CrossRefGoogle Scholar
  49. Shorrocks, A. F., & Wan, G. (2005). Spatial decomposition of inequality. Journal of Economic Geography, 5(1), 59–81.CrossRefGoogle Scholar
  50. Spiezia, V. (2003). Measuring regional economies. Statistics Brief, 6, Statistics Directorate of the OECD, Paris.Google Scholar
  51. Theil, H. (1967). Economics and information theory. Amsterdam: North-Holland.Google Scholar
  52. Williamson, J. G. (1965). Regional inequality and the process of national development: A description of the patterns. Economic Development and Cultural Change, 13(4), 1–84.CrossRefGoogle Scholar
  53. World Bank. (2016). Poverty and shared prosperity 2016: Taking on inequality. Washington, DC: World Bank.  https://doi.org/10.1596/978-1-4648-0958-3.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V., part of Springer Nature 2017

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of ExtremaduraBadajozSpain
  2. 2.Departamento de Economía-IDEARUniversidad Católica del NorteAntofagastaChile

Personalised recommendations