A panel vector AutoRegression analysis of income inequality dynamics in each of the 50 states of USA

2017 ◽  
Vol 44 (6) ◽  
pp. 797-815
Author(s):  
Olugbenga Onafowora ◽  
Oluwole Owoye
Keyword(s):  
Income Inequality ◽  
Educational Attainment ◽  
Capita Income ◽  
Economic Freedom ◽  
Vector Autoregression ◽  
Population Ageing ◽  
Content Type ◽  
Long Run ◽  
Per Capita ◽  
Panel Vector Autoregression

Purpose The purpose of this paper is to investigate the income inequality dynamics in each of the 50 states of USA over the period 1981-2011. Design/methodology/approach The paper estimates an augmented Kuznets curve panel Vector AutoRegression in per capita income, economic freedom, educational attainment, unemployment, and population ageing along with evaluating generalized impulse responses functions (GIRF) and generalized forecast-error variance decompositions (GFEVD). Findings All the variables are integrated of order one and are panel cointegrated. Kuznets’ hypothesized inverted U-shaped relationship between inequality and growth is not supported by the data. Unemployment and population ageing have statistically significant positive effects on inequality in the long-run; education has statistically significant negative impact; economic freedom has statistically insignificant positive effect. Long-run bidirectional causality exists among the variables. GFEVD show that excluding income inequality itself, variation in income inequality is more influenced by perturbations in per capita income, educational attainment, and unemployment. GIRF corroborate the results of the GFEVD. Originality/value This paper fulfills an identified need to study the causal relationship between inequality and its determining factors without assuming the a priori exogeneity or endogeneity of the underlying variables.

Economic freedom and tax revenue performance in sub-Saharan Africa

2018 ◽  
Vol 16 (4) ◽  
pp. 610-638 ◽  
Author(s):  
James Oladapo Alabede
Keyword(s):  
Capita Income ◽  
Economic Freedom ◽  
Sub Saharan Africa ◽  
Tax Revenue ◽  
Traditional Theory ◽  
Per Capita Income ◽  
Content Type ◽  
Tax Effort ◽  
Per Capita ◽  
Sub Saharan

Purpose This study aims to expand the conventional tax effort model to incorporate relevant economic freedom variables to investigate whether economic freedom fosters tax revenue performance in `sub-Saharan Africa (SSA). Design/methodology/approach This study uses data from 42 countries across the four sub-regions of SSA from the period 2005 to 2012 with 252 year-country observations in an unbalanced panel method. The data were statistically treated using feasible generalised least square (FGLS) and panel-corrected standard errors (PCSE) estimate techniques. Findings The findings are twofold. First, the principal finding of the study suggests that economic freedom promotes tax revenue performance. Precisely, the FGLS analysis indicates that property rights freedom, freedom from corruption and investment freedom, as well as the composite economic freedom, exerted positive significant impact on tax revenue performance. This implies that country, which attained high degree of economic freedom, is likely to have higher tax-to-GDP ratio than a country with low level of economic freedom. Secondly, the results of most conventional variables conform to the prediction in the traditional theory except per capita income. Specifically, agriculture share in GDP and per capita income indicate negative significant relationship with tax revenue performance. Originality/value Because little is known empirically about the connection between economic freedom and tax revenue performance, this study extended the conventional tax effort model to incorporate the economic freedom to bridge the knowledge gap due to the absence of empirical evidence on the relationship between economic freedom and tax effort.

Examining the nonlinear impact of selected macroeconomic determinants on FDI inflows in India

2020 ◽  
Vol 14 (5) ◽  
pp. 711-733 ◽  
Author(s):  
Rajesh Sharma ◽  
Pradeep Kautish
Keyword(s):  
Capita Income ◽  
Partial Information ◽  
Structural Break ◽  
Consumption Expenditure ◽  
Per Capita Income ◽  
Fdi Inflows ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Per Capita

Purpose Over the years, India has witnessed irregular FDI inflows. Therefore, this study aims to explore the asymmetric impact of per capita income, final consumption expenditure, globalization index and exchange rate on FDI inflows in India. Design/methodology/approach Using the nonlinear autoregressive distributed lag bounds framework and unknown structural break, the study investigates the impacts of selected macroeconomic variables in driving FDI inflows in India during the study period (1979-2016). Findings The outcomes of the study confirm the asymmetric relationship between FDI inflows and its determinants during the study period. The results have confirmed that the improvement in per capita income, private consumption expenditure, globalization index and currency value appreciation play a crucial role in increasing FDI inflows in India. In contrast, the downside movements in the volume of consumption expenditure, globalization index and depreciation of the currency value in relation to the trade partners result in reducing the volume of FDI inflows in the long run. Originality/value For determining FDI inflows, previous studies have considered the overall impact of its potential determinants, which may provide partial information about the phenomenon. The adopted nonlinear approach highlights that both the types of fluctuations (i.e. upside and downside) in the independent variables may affect FDI inflows differently and substantially. The nonlinear association between FDI and selected determinants may be vital in formulating a long-term policy.

Financial Deepening and Income Inequality in Nigeria: Evidence from Zivot-Andrews and Gregory-Hansen Structural Break Analyses

2021 ◽  
Vol 39 (8) ◽  
Author(s):  
Bosede Ngozi Adeleye ◽  
Solomon Nathaniel ◽  
Ifeoluwa Ogunrinola ◽  
Edamisan Ikuemonisan
Keyword(s):  
Income Inequality ◽  
Capita Income ◽  
Structural Breaks ◽  
Structural Break ◽  
Break Point ◽  
Annual Data ◽  
Financial Deepening ◽  
Per Capita Income ◽  
Long Run ◽  
Per Capita

Aligning with the Sustainable Development Goal (SDG) 10 agenda, this paper undertakes a structural break analysis on the effects of financial deepening on income inequality in Nigeria using annual data from 1980 to 2015 and error correction approach within the framework of the autoregressive distributed lags (ARDL) model. Major findings are as follows: (1) in the long-run, financial deepening and per capita income have equalising impact on income inequality; (2) an equalising effect of financial deepening is observed at the turn of a break point; (3) surprisingly, in the short-run, financial deepening aggravates inequality, and (4) the equalising effects of these variables are robust to the choice of financial deepening variables, the different structural break points and model specifications. These results suggest that income inequality depends on financial deepening and per capita income and that not controlling for structural breaks may lead to wrong inferences when making decisions on issues related to reducing income inequality in Nigeria.

Inflation and income inequality in developed and developing countries

2019 ◽  
Vol 46 (3) ◽  
pp. 611-632 ◽  
Author(s):  
Sima Siami-Namini ◽  
Darren Hudson
Keyword(s):  
Developing Countries ◽  
Monetary Policy ◽  
Income Inequality ◽  
Granger Causality ◽  
Nonlinear Relationship ◽  
Content Type ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Purpose The purpose of this paper is to investigate both linear and/or nonlinear effects of inflation on income inequality and to test the Kuznets hypothesis using panel data of 24 developed countries (DCs) and 66 developing countries (LDCs) observed over the period of 1990–2014. Design/methodology/approach This paper explores the short- and long-run Granger causality relationship between inflation and income inequality using the Toda and Yamamoto (1995) procedure and a Vector Error Correction Model (VECM) approach. The existence of a nonlinear relationship between inflation and income inequality is confirmed implying as inflation rises income inequality decreases. Income inequality then reaches a minimum and then starts rising again. The findings of this paper show the existence of Kuznets “U-shaped” hypothesis between income inequality and real GDP per capita in DCs group, and the existence of Kuznets’ inverted “U-shaped” hypothesis for LDCs group. Findings The results indicate that there is no bi-directional Granger causality between inflation and income inequality in the short-run, but, there is bi-directional Granger causality in the long-run for both the DCs and LDCs group. The results help us to assess the effectiveness of monetary policy in reducing income inequality in both the DCs and LDCs group. As a policy implication, monetary policy is often aimed at controlling the annual rate of inflation in the long-run with a short-run focus on reducing output gaps and creating employment. However, managing inflation may have implications for income inequality. Originality/value This is original research paper which analyzes the “U-shaped” and inverted “U-shaped” paths of income inequality and real GDP per capita for large sample of two group countries including developed and developing countries, respectively. Also, this paper analyzes the nonlinear relationship between inflation and income inequality in two groups. Furthermore, this paper investigates the short- and long-run relationship between variables. The results are important for policy makers.

Impact of educational and gender inequality on income and income inequality in South Asian countries

2020 ◽  
Vol 47 (8) ◽  
pp. 1043-1062
Author(s):  
Kashif Munir ◽  
Ayesha Kanwal
Keyword(s):  
Income Inequality ◽  
South Asian ◽  
Gender Inequality ◽  
Capita Income ◽  
Educational Inequality ◽  
Asian Countries ◽  
Per Capita Income ◽  
Content Type ◽  
Inequality In Education ◽  
Per Capita

PurposeThe objectives of this study are threefold: firstly, to measure the impact of educational inequality on income inequality, and per capita income; secondly, to measure the impact of gender inequality in education on income inequality, per capita income and educational inequality; and lastly, to test the Kuznets inverted U-shape hypothesis between inequality in education and average year of schooling.Design/methodology/approachThe study has adopted the Marin and Psacharopoulos (1976) model of human capital in which income earned by an individual can be estimated as a function of number of year spent in schooling or education. Gini coefficient is used as a measure of income inequality, while inequality in education is measured by Gini index of educational inequality. Gender inequality in education is measured by the difference between male and female enrolment ratios as a proportion of male enrolment. The study utilizes the data of six South Asian countries, i.e. Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka from 1980 to 2010 at five-year average and employs fixed effect model (FEM) and random effect model (REM) for estimation.FindingsResult suggests that educational inequality and average year of schooling have positive and significant impact on income inequality. Primary (basic) education and tertiary (higher) education reduce income inequality, while secondary education widens income inequality. Negative relationship exists between educational inequality and per capita income. Unequal distribution of education among boys and girls at primary level increases income inequality, while reduces income inequality at tertiary level. Gender inequality in secondary and tertiary level of education reduces per capita income, while unequal distribution of education among boys and girls further increases the educational inequality. Kuznets inverted U-shape hypothesis does not hold between education expansion and educational inequality, while weak U-shape relationship exists in South Asian countries.Practical implicationsGovernment has to provide free education in poor regions and makes employment programs to reduce the income and educational inequality respectively, while to remove gender inequality in education it is necessary to build more schools especially for girls. Government has to launch different online education programs for expansion in education at all levels.Originality/valueThis study adds to the literature by analyzing whether the inequality in income increases (decreases) due to increase (decrease) in educational and gender inequality in South Asian countries. This study contributes in the existing literature by developing a measure of educational and gender inequality in education in South Asian countries.Peer review The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-04-2020-0226.

If you're corrupt, you'd better be free

2020 ◽  
Vol 47 (6) ◽  
pp. 1307-1325 ◽  
Author(s):  
Oguzhan Dincer
Keyword(s):  
Capita Income ◽  
Economic Freedom ◽  
Threshold Level ◽  
Ordinary Least Squares ◽  
Per Capita Income ◽  
Negative Effects ◽  
Content Type ◽  
Us States ◽  
Per Capita ◽  
The Relationship

PurposeThis study aims to investigate if the level of economic freedom matters for how corruption affects per capita income in US states.Design/methodology/approachUsing a new (and novel) index of corruption, which is based on Associated Press news wires, the author estimates the long-run cointegrating relationship between corruption, economic freedom and per capita income with fully modified ordinary least squares (FMOLS) following Pedroni (2000).FindingsThe author finds that there is a threshold level of economic freedom that determines if corruption reduces the per capita income in a state. According to the FMOLS estimations, the negative effects of corruption on income decrease as economic freedom increases, and they eventually disappear.Originality/valueThis is the first study investigating the intricate relationship between corruption, economic freedom and economic performance using data from US states. The study uses a news-based measure of corruption constructed by Dincer and Johnston (2017), which has several advantages over the convictions-based measure used in previous studies analyzing the relationship between corruption and growth using US data. The study takes into account the integration and cointegration properties of the data and estimates the relationship among the cointegrated variables using FMOLS following Pedroni (2000).

scholarly journals Health capabilities and the determinants of infant mortality in Brazil, 2004–2015: an innovative methodological framework

2021 ◽  
Vol 21 (1) ◽  
Author(s):  
Alexandre Bugelli ◽  
Roxane Borgès Da Silva ◽  
Ladislau Dowbor ◽  
Claude Sicotte
Keyword(s):  
Infant Mortality ◽  
Educational Attainment ◽  
Health Professionals ◽  
Capita Income ◽  
Mortality Rates ◽  
Fertility Rate ◽  
Employment Rate ◽  
Infant Deaths ◽  
Bolsa Familia ◽  
Per Capita

Abstract Background Despite the implementation of a set of social and health policies, Brazil has experienced a slowdown in the decline of infant mortality, regional disparities and persistent high death levels, raising questions about the determinants of infant mortality after the implementation of these policies. The objective of this article is to propose a methodological approach aiming at identifying the determinants of infant mortality in Brazil after the implementation of those policies. Method A series of multilevel panel data with fixed effect nested within-clusters were conducted supported by the concept of health capabilities based on data from 26 Brazilian states between 2004 and 2015. The dependent variables were the neonatal, the infant and the under-five mortality rates. The independent variables were the employment rate, per capita income, Bolsa Família Program coverage, the fertility rate, educational attainment, the number of live births by prenatal visits, the number of health professionals per thousand inhabitants, and the access to water supply and sewage services. We also used different time lags of employment rate to identify the impact of employment on the infant mortality rates over time, and household income stratified by minimum wages to analyze their effects on these rates. Results The results showed that in addition to variables associated with infant mortality in previous studies, such as Bolsa Família Program, per capita income and fertility rate, other factors affect child mortality. Educational attainment, quality of prenatal care and access to health professionals are also elements impacting infant deaths. The results also identified an association between employment rate and different infant mortality rates, with employment impacting neonatal mortality up to 3 years and that a family income below 2 minimum wages increases the odds of infant deaths. Conclusion The results proved that the methodology proposed allowed the use of variables based on aggregated data that could hardly be used by other methodologies.

Political Finance and Participation in Congressional Elections

1976 ◽  
Vol 425 (1) ◽  
pp. 59-73 ◽  
Author(s):  
Paul A. Dawson ◽  
James E. Zinser
Keyword(s):  
Income Inequality ◽  
Political Parties ◽  
Capita Income ◽  
Congressional Elections ◽  
Campaign Contributions ◽  
Factors Affecting ◽  
Political Finance ◽  
Per Capita ◽  
Registered Voters ◽  
Campaign Expenditures

Citizens participate in the electoral process both to enjoy intrinsic benefits and in the hope of future bene fits. Factors affecting the strength of these consumption and investment motives therefore will affect registration and turnout rates, levels of campaign contributions, and electoral margins. To some extent, the strength of these motives is fixed by relatively static factors: levels of district per capita income, the degree of income inequality, the partisan division of registered voters. However, both motives also are affected by factors more apt to vary: for example, statutory arrangements, the activities of political parties, levels and types of campaign expenditures. In particular, statutory arrangements and the activities of parties which reduce costs can increase participation. Moreover, substan tial efforts to alter the partisan division of registered voters can increase campaign contributions. Also, campaign expenditures channel motivations in partisan directions, stim ulate partisan turnout, and affect electoral margins. Results reported here suggest the likelihood of bipartisan support for policies facilitating registration and voting, challenge assumptions about the effects of incumbency on campaign contributions, raise doubts about legislated ceilings on cam paign expenditures, and weaken the case for public financing of congressional elections.

Does educational progress impact energy consumption? A causality test for India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Soumen Rej ◽  
Barnali Nag
Keyword(s):  
Energy Consumption ◽  
Energy Supply ◽  
Causality Test ◽  
Content Type ◽  
Vector Error Correction ◽  
Educational Advancement ◽  
Long Run ◽  
Short Run ◽  
Development Goals ◽  
Per Capita

Purpose Both energy and education have been positioned as priority objectives under the itinerary of UN development goals. Hence, it is necessary to address the implicit inter relationship between these two development goals in the context of developing nations such as India who are trying to grow in both per capita income and socio economic factors whilst struggling with the challenges of a severe energy supply constrained economy. Design/methodology/approach In the present study, the causal relationship between energy consumption per capita and education index (EI) as a proxy of educational advancement is investigated for India for 1990–2016 using the Johansen-Juselius cointegration test and vector error correction model. Findings The empirical results infer although energy consumption per capita and EI lack short run causality in either direction, existence of unidirectional long run causality from EI to per capita energy consumption is found for India. Further, it is observed that energy consumption per capita takes around four years to respond to unit shock in EI. Research limitations/implications The findings from this study imply that with the advancement of education, a rise in per capita energy consumption requirement can be foreseen on the demand side, and hence, India’s energy policy needs to emphasize further its sustainable energy supply goals to meet this additional demand coming from a population with better education facilities. Originality/value The authors hereby confirm that this manuscript is entirely their own original study and not submitted elsewhere.

Film Production And Economic Performance: Should South Africa Invest In Movies?

2021 ◽  
Vol 4 (2) ◽  
pp. 125-144
Author(s):  
Andrew Phiri ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Economic Performance ◽  
Government Spending ◽  
Capita Income ◽  
Direct Investment ◽  
Film Production ◽  
Domestic Investment ◽  
Per Capita Income ◽  
Long Run ◽  
Per Capita

The movie industry is increasingly recognised as a possible avenue for improving economic performance. This study focuses on film production and its influence on South African economic growth (per capita income and employment between 1970 and 2020). Our autoregressive lag distributive (ARDL) estimates on a loglinearised endogenous growth model augmented with creative capital indicate that the production of movies has no significant effects on long-run GDP growth, per capita GDP and employment. The baseline regressions find a short-run positive and significant influence of film production on per capita income and are devoid of long-run effects. However, re-estimating the regressions with interactive terms between movie production and i) government spending ii) foreign direct investment, improve the significance of film regression coefficients which all turn positive and significant, for government spending, and negative for foreign direct investment. Our results indicate that foreign investment crowds out domestic investment whilst government investment in movies is growth-enhancing.

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