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Regional inequality by the Theil index

Vol. 26, Iss. 10, OCTOBER 2020

Received: 27 August 2020

Received in revised form: 10 September 2020

Accepted: 24 September 2020

Available online: 29 October 2020


JEL Classification: R11, R13

Pages: 2310–2327


Moroshkina M.V. Institute of Economics, Karelian Research Center of Russian Academy of Sciences (IE KarRC RAS), Petrozavodsk, Republic of Karelia, Russian Federation


Subject. Regions are different across Russia in terms of most social and economic indicators. There is the regional inequality of economic and social indicators. The Russian regions demonstrate a serious gap in terms of the productive sector development, since the industrial and productive potential is unevenly allocated across regions.
Objectives. The study mainly analyzes the dynamics of the regions’ economic development, which is measured by GRP per capita and industry. I also determine what caused regional disparities within 1990 through 2017. Thus, I examine the Russian regions and focus on the level of cross-regional differentiation of the reproductive potential.
Methods. Examining the cross-regional difference, I sufficiently apply techniques for evaluating the regional inequality. As part of the study, I use the Theil index to measure the difference within a group and of groups. The study will not only reveal and analyze the extent of cross-regional differentiation, but also observe how the inflation influence the dynamics of regional difference of the Russian regions.
Results. As part of the analysis of trends in the Theil index, the Russian regions were observed to have different GRP per capita and goods shipped. The findings signify a growth in the regional inequality.
Conclusions and Relevance. The Russian regions are showed to fall into a greater disparity when oil prices grow. This may be possible due to a reduction in the State financial aid to lagging regions. As the regional differences were found to tend to grow, I can admit the divergence of the Russian regions. The findings can be used to create strategic documents, local and regional development programs.

Keywords: Russian region, GRP per capita, Theil index


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