Empirical Economics

, Volume 46, Issue 1, pp 65–99

Decomposition of inter-regional poverty gap in India: a spatial approach

  • Somnath Chattopadhyay
  • Amita Majumder
  • Hasanur Jaman
Article

DOI: 10.1007/s00181-013-0683-8

Cite this article as:
Chattopadhyay, S., Majumder, A. & Jaman, H. Empir Econ (2014) 46: 65. doi:10.1007/s00181-013-0683-8
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Abstract

This paper examines the impact of various socio-economic factors on consumption in rural West Bengal, an eastern state of India, using a regression-based technique reformulated in a spatial framework. The difference of incidences of poverty (head count ratios) in two parts (North and South) of rural West Bengal is then decomposed using the familiar Oaxaca decomposition methodology into an aggregate characteristics effect, which is interpreted as a resource effect and an aggregate coefficients effect, which is interpreted as an efficiency effect. An important observation from the present analysis is that the poorer North Bengal has a scarcity in terms of availability of characteristics (resources) compared to that in South Bengal and the resource scarcity in North Bengal is the dominant factor causing the poverty gap between the two parts of West Bengal. Thus, attention needs to be paid to North Bengal with respect to enhancement of important policy variables like education level, Government aid, and employment opportunities.

Keywords

PovertyOaxaca decompositionSpatial regression

JEL Classification

C21I32

Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  • Somnath Chattopadhyay
    • 1
  • Amita Majumder
    • 2
  • Hasanur Jaman
    • 3
  1. 1.Monetary Research ProjectICRA LimitedKolkataIndia
  2. 2.Indian Statistical InstituteKolkataIndia
  3. 3.Bidhannagar Municipal SchoolKolkataIndia