Skip to main content

The Spatial Dimension of Inequality

  • Chapter
  • First Online:
Spatial Economics Volume II
  • 483 Accesses

Abstract

This chapter focuses on spatial inequality defined as inequality in the living standards between people located in different geographical areas (city, region, country). The aim is to describe and explain the research on spatial inequality addressing different issues. The first part of the study is devoted to the measurement of spatial inequality considering income as a proxy for living standards. The second part of the chapter focuses on regional inequality mainly in Europe, highlighting specific aspects of different methodologies used to assess spatial inequality. The chapter also discusses the causal relationship between spatial inequality and economic activity.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 119.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 159.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 159.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    The elephant chart, as well as its interpretation, has been at the center of an economic and political debate. See Ravaillon (2018) for a discussion on this issue.

  2. 2.

    For further details, see Bellù and Liberati (2006, p. 50).

  3. 3.

    The ten countries that joined EU in 2004 are: the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Slovakia, Slovenia, and Poland.

  4. 4.

    The NUTS classification is a hierarchical system for dividing up the economic territory of the EU.

  5. 5.

    Venables (2005) provides the following definition of the New Economic Geography: “The New Economic geography provides an integrated and micro-founded approach to spatial economics. It emphasizes the role of clustering forces in generating an uneven distribution of economic activity and income across space. The approach has been applied to the economics of cities, the emergence of regional disparities, and the origins of international inequalities.”

  6. 6.

    Equations (6.2) and (6.3) correspond to equations (3) and (4), respectively, in the original paper.

References

  • Andreoli, F., & Peluso, E. (2018). So Close Yet So Unequal: Neighborhood Inequality in American Cities. ECINEQ Working Paper N. 477.

    Google Scholar 

  • Andreoli, F., & Peluso, E. (2019). Inference for the Local Inequality Index. mimeo.

    Google Scholar 

  • Arnold, F., & Blöchliger, H. (2016). Regional GDP in OECD Countries: How Has Inequality Developed Over Time? OECD Economics Department Working Papers No. 1329.

    Google Scholar 

  • Atkinson, A. (1970). On the Measurement of Inequality. Journal of Economic Theory, 3, 244–263.

    Article  Google Scholar 

  • Bellù, L. G., & Liberati, P. (2006). Describing Income Inequality. Theil Index and Entropy Class Indexes. EASYPol, Module 051.

    Google Scholar 

  • Benabou, R. (1993). Working of a City: Location, Education, and Production. Quarterly Journal of Economics, 108, 619–652.

    Article  Google Scholar 

  • Bhattacharya, N., & Mahalanobis, B. (1967). Regional Disparities in Household Consumption in India. Journal of the American Statistical Association, 62, 143–161.

    Article  Google Scholar 

  • Borts, G. H., & Stein, J. L. (1964). Economic Growth in a Free Market. New York: Columbia University Press.

    Google Scholar 

  • Bourguignon, F. (1979). Decomposable Inequality Measures. Econometrica, 47, 901–920.

    Article  Google Scholar 

  • Brambilla, M., Michelangeli, A., & Peluso, E. (2015). Cities, Equity and Quality of Life. In A. Michelangeli (Ed.), Quality of Life in Cities: Equity, Sustainable Development and Happiness from a Policy Perspective (pp. 91–109). Routledge.

    Google Scholar 

  • Ciccone, A. (2002). Agglomeration Effects in Europe. European Economic Review, 46(2), 213–227.

    Article  Google Scholar 

  • Cliff, A., & Ord, J. (1973). Spatial Autocorrelation. London: Pion.

    Google Scholar 

  • Cliff, A., & Ord, J. (1981). Spatial Process: Models and Applications. London: Pion.

    Google Scholar 

  • Combes, P., Duranton, G., & Gobillon, L. (2008). Spatial Wage Disparities: Sorting Matters! Journal of Urban Economics, 63(2), 723–742.

    Article  Google Scholar 

  • Cowell, F. (1980). On the Structure of Additive Inequality Measures. Review of Economic Studies, 7, 521–531.

    Article  Google Scholar 

  • Dawkins, C. J. (2007). Space and the Measurement of Income Segregation. Journal of Regional Science, 47, 255–272.

    Article  Google Scholar 

  • Easterly, W. (2007). Inequality Does Cause Underdevelopment: Insights from a New Instrument. Journal of Development Economics, 84(2), 755–776.

    Article  Google Scholar 

  • Ezcurra, R., Pascual, P., & Rapún, M. (2007). The Spatial Distribution of Income Inequality in the European Union. Environment and Plannin A, 39(4), 869–890.

    Article  Google Scholar 

  • Haining, R. (1990). Spatial Data Analysis in the Social and Environmental Sciences. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Haughton, J. H., & Khandker, S. R. (2009). Handbook on Poverty and Inequality. Washington, DC: World Bank Publications.

    Google Scholar 

  • Henderson, J. V., Squires, T., Storeygard, A., & Weil, D. (2017). The Global Distribution of Economic Activity: Nature, History, and the Role of Trade. The Quarterly Journal of Economics, 133(1), 357–406.

    Article  Google Scholar 

  • Hoffmeister, O. (2009). The Spatial Structure of Income Inequality in the Enlarged EU. Review of Income and Wealth, 55(1), 101–127.

    Article  Google Scholar 

  • Kanbur, R. (2006). The Policy Significance of Inequality Decompositions. The Journal of Economic Inequality, 4(3), 367–374.

    Article  Google Scholar 

  • Kanbur, R., & Venables, A. (2005). Rising Spatial Disparities and Development. Number 3 in United Nations University Policy Brief. Helsinki.

    Google Scholar 

  • Keeley, B. (2015). Income Inequality: The Gap between Rich and Poor. Paris: OECD Insights, OECD Publishing.

    Book  Google Scholar 

  • Krugman, P., 1993. First Nature, Second Nature, and Metropolitan Location. Journal of Regional Science 33 (2), 129–144.

    Google Scholar 

  • Kuznets, S. (1955). Economic Growth and Income Inequality. American Economic Review, 45, 1–28.

    Google Scholar 

  • Kuznets, S. (1963). Quantitative Aspects of the Economic Growth of Nations: VIII, Distribution of Income by Size. Economic Development and Cultural Change, 2, 1–80.

    Article  Google Scholar 

  • Lakner, C., & Milanovic, B. (2016). Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession. The World Bank Economic Review, 30(2), 203–232.

    Article  Google Scholar 

  • Lessmann, C. (2014). Spatial Inequality and Development – Is There an Inverted-U Relationship? Journal of Development Economics, 106, 35–51.

    Article  Google Scholar 

  • Lessmann, C., & Seidel, A. (2017). Regional Inequality, Convergence and Its Determinants – A View from Outer Space. European Economic Review, 92, 110–132.

    Article  Google Scholar 

  • Martín-Román, J., Ayala, L., & Vicente, J. (2017). Regional Inequality in Decentralized Countries: A Multi-Country Analysis Using LIS. LIS Working PaperSeries, No. 697.

    Google Scholar 

  • Mussini, M. (2017). Decomposing Changes in Inequaliy and Welfare Between EU Regions: The Roles of Population Change, Re-Ranking and Income Growth. Social Indicators Research, 130, 455–478.

    Article  Google Scholar 

  • Novotný, J. (2007). On the Measurement of Regional Inequality: Does Spatial Dimension of Income Inequality Matters? Annals of Regional Science, 41, 563–580.

    Article  Google Scholar 

  • Openshaw, S. (1984). The Modifiable Areal Unit Problem. Concepts and Techniques in Modern Geography #38. Norwick: Geo Books.

    Google Scholar 

  • Östh, J., Clark, W. A., & Malmberg, B. (2015). Measuring the Scale of Segregation Using K-Nearest Neighbor Aggregates. Geographical Analysis, 47(1), 34–49.

    Article  Google Scholar 

  • Piketty, T. (2014). Capital in the Twent-First Century. Harvard University Press.

    Google Scholar 

  • Piketty, T., & Saez, E. (2014). Inequality in the Long Run. Science, 344, 838–843.

    Article  Google Scholar 

  • Pyatt, G. (1976). On the Interpretation and Disaggregation of Gini Coefficient. Economic Journal, 86, 243–254.

    Article  Google Scholar 

  • Ravaillon, M. (2018). Inequality and Globalization: A Review Essay. Journal of Economic Literature, 56(2), 620–642.

    Article  Google Scholar 

  • Reardon, S. F., Matthews, S. A., O’Sullivan, D., Lee, B. A., Firebaugh, G., Farrell, C. R., & Bischoff, K. (2008). The Geographic Scale of Metropolitan Racial Segregation. Demography, 45(3), 489–514.

    Article  Google Scholar 

  • Shorrocks, A. F. (1980). The Class of Additively Decomposable Inequality Measures. Econometrica, 48, 613–625.

    Article  Google Scholar 

  • Shorrocks, A., & Wan, G. (2005). Spatial Decomposition of Inequality. Journal of Economic Geography, 5(1), 59–81.

    Article  Google Scholar 

  • Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1), 65–94.

    Article  Google Scholar 

  • Theil, H. (1967). Economics and Information Theory. Amsterdam: North-Holland.

    Google Scholar 

  • United Nations Human Settlements Programme (UN-Habitat). (2008). State of the World’s Cities 2008/2009, Harmonious Cities. London: Earthscan.

    Google Scholar 

  • Venables, A. J. (2005). New Economic Geography. In Palgrave Dictionary of Economics. London: Palgrave Macmillan.

    Google Scholar 

  • Wheeler, C. H., & La Jeunesse, E. A. (2008). Trends in Neighbourhood Income Inequality in the U.S.: 1980–2000. Journal of Regional Science, 48(5), 879–891.

    Article  Google Scholar 

  • Williamson, J. G. (1965). Regional Inequality and the Process of National Development: A Description of Patterns. Economic Development and Cultural Change, 13(4), 3–45.

    Article  Google Scholar 

  • Wong, D. (2009). The Modifiable Areal Unit Problem (MAUP). In A. S. Fotheringham & P. Rogerson (Eds.), The SAGE Handbook of Spatial Analysis (pp. 105–124). Los Angeles: SAGE.

    Chapter  Google Scholar 

  • Yitzhaki, S., & Lerman, R. (1991). Income Stratification and Income Inequality. Review of Income and Wealth, 37(3), 313–329.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Alessandra Michelangeli .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2021 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Michelangeli, A. (2021). The Spatial Dimension of Inequality. In: Colombo, S. (eds) Spatial Economics Volume II. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-40094-1_6

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-40094-1_6

  • Published:

  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-030-40093-4

  • Online ISBN: 978-3-030-40094-1

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

Publish with us

Policies and ethics