On the issue of impact of income inequality on the socio-economic development of territories

Abstract

The issues of economic inequality and justice were considered in the works of the philosophers of Ancient Greece. Over time, the problem of income inequality has not lost its relevance, which is confirmed by domestic and foreign studies. Until 2015, the capital of the Russian Federation had the highest value of the Gini index, which indicates a high degree of inequality in income distribution in the territory of this subject. Over time, the situation has changed, in particular, by increasing the incomes of the least well-off groups of the population, providing them with subsidies and payments. The purpose of the study is to analyse to what extent these changes have an impact on the socio-economic development of the region. With the help of econometric calculations, the degree of dependence between the equity index and the value of the gross regional product per capita has been determined. It is revealed that there is an inverse relationship between the considered indicators, that is, a reduction in income inequality has an impact on the growth of regional production. The high value of the coefficient of determination indicates the high quality of the constructed model. The possibility of using the simulation results in practice is confirmed by calculations of the average approximation error and the Fisher criterion.

Keywords

• inequality
• income distribution
• socio-economic development
• gini index
• equity index
• gross regional product
• econometric modelling