Denzo Kamiya

This paper analyzes inequality of income distribution, looking at consumption expenditure per capita, over the period 1990-2002. Using three-yearspan micro-data set drawn from Susenas, we determine the pattern of distribution, mainly on the basis of Gini coefficient, with Lorenz curve and cumulative frequency distribution for complete description of distribution. Results are compared with Atkinson, Variance of Logarithm and Theil indices. We examine sources of income inequality by decomposing Theil indices into urban and rural components. The main findings are, first, the overall income inequality was increasing both before and after the economic crisis of 1997. Second, urban inequality was higher not only than rural inequality but also than overall inequality. Third, population movement from rural to urban area worked to increase the degree of inequality. Keywords: Decomposition, Indonesia, Inequality, Micro-data.