An analysis of the Effect of Public Subsidies on Income Inequality of Forestry Household using Gini Coefficient Decomposition

Abstract

In this study, the Gini coefficient is estimated and decomposed within as well as between the forest industries according to income components. Analytical results indicate that the average Gini coefficient for the entire sample from 2009 to 2018 is 0.478 which can be interpreted that a high level of inequality in the forestry household income exists. Forestry investment subsidies are proven to play a vital role in alleviating income inequality for forestry households. This study suggests that government needs to increase the public forestry subsidies in order to mitigate the high level of income inequality.