Content №3 от 2016
The Relationship of Normal and Excessive Personal Income Inequality with Regional Economies Performance Indicators
The article uses the following methods: A.Yu. Shevyakov's approach to the decomposition of the Gini coefficient on the normal and excessive inequality; the full deflation method for evaluation of the real income and real productivity; correlation and regression analysis, and construction of Cobb-Douglas type production functions. We proposed three levels to split the normal and excessive inequality: the poverty line, the social minimum boundary, and the social well-being boundary. There were obtained an inverse relationship between real per capita income and the excessive inequality Gini coefficient, as well as some sort of Kuznets curve for the relationship between real per capita income and the normal inequality Gini coefficient for Russian regions in 2013. The correlations of normal and excessive inequality with the general development indicators, as well as indicators of the population composition and dynamics, the structures of income and gross regional product, industrial structure of the economy, and the population's wealth were estimated. By incorporating the separated Gini coefficients in interregional five-factor Cobb-Douglas production function, we confirmed the positive correlation of normal inequality and negative correlation of excessive inequality with production in Russian regions. It was concluded that excessive inequality, on the one hand, is the result of low development, and, on the other hand, suppresses production incentives in regions. At the same time, the normal inequality promotes economic development, which is at first accompanied by growth in this type of inequality, and then by its decline.
