On Estimation of Inter-Regional Inequality

Abstract

Many publications on inter-regional inequality use weighting by region’s share in the national population in estimating an inequality index. This paper demonstrates that, first, such an approach is conceptually inconsistent, yielding a (very rough) estimate of interpersonal inequality of the country’s whole population rather than an estimate of inter-regional inequality, and second, an inadequate weighting leads to the incorrect value of an inequality index. The author illustrates distortions caused by the use of weighting with the help of the income inequality among Russian regions (measured by the Gini coefficient)

Keywords

• income inequality
• Gini coefficient
• Lorentz curve
• Williamson coefficient of variation