Analysis of Factors that Affect the Inequality of Income Distribution of Regencies in Bali Province

Abstract

The purpose of economic development is essential to improve the welfare of society. Improving public welfare must be balanced with an increase in inequitable economic growth. There are 8 regencies and a city in Bali to be a concern in this study. One measure of the success of economic development is the level of inequality in income distribution. The purpose of this study is to analyze the factors that influence the inequality of income distribution between city/regencies in Bali. The type of data used is secondary data with the type of panel data which is a combination of time-series data from 2012-2017 with cross-section data from 8 regencies and a city in Bali. Data is processed by panel data analysis with fixed effect model regression. The variables used in this study are dependent and independent variables. The dependent variable is the level of inequality in income distribution as measured by the Gini Index, while the independent variables are regional government expenditures (average expenditure per capita), regional minimum wages, population, and the contribution of the tourism sector (travel agents, restaurants). Panel data analysis in this study produced the best model, namely Random Effect Model. The independent variable Regional Expenditures negatively affects the inequality of income distribution in Bali in 2012-2017.