The Bi-dimensional Decomposition of Regional Inequality Based on the Weighted Coefficient of Variation

This paper offers the bi-dimensional decomposition of regional inequality by regional groups and income components based on the population weighted coefficient of variation. The method enables us to analyze the contributions of income components to within-region and between-region inequalities, and thus to overall regional inequality in a coherent framework. The method is applied to provincial GDP and population data in Indonesia for the years 1985, 1995 and 2004