Changing Pattern of Inequality in the Distribution of Consumer Expenditure in Rural West Bengal (1983 – 2012)

Abstract

Inequalities in the distribution of income or expenditure or wealth are negative indicators of development of a country or of a region. Though per capita income is considered as the main indicator of development, such inequalities are needed to be measured to have a more accurate assessment of development. In India, except some special surveys by National Council for Applied Economic Research (NCAER), data on the distribution of income or wealth are not available, and the data on the distribution of consumer expenditure collected and compiled by the National Sample Survey Organisation (NSSO) are used as the proxy. Gini coefficient/index (Gini, 1912, 1921, 1936) is most popularly used as a relative/index measure of inequality, though it is not considered as a fully reasonable measure of inequality. As a result, other measures like Lorenz curve (Lorenz,1905), Dalton’s measure (Dalton,1920), Theil’s entropy measure (Theil, 1967), Atkinson’s measure (Atkinson, 1970), Sen’s measure (Sen, 1973), standard deviation of logarithms, coefficient of variation, mean logarithmic deviation (Theil, 1972), extended Gini indices (Chakraborty, 1988), Kakwani’s index (Kakwani, 1980), generalised Gini index (Weymark, 1981),squared coefficient of variation, relative mean deviation, etc. have also parallel use. All these measures are either relative or index measures. Majority of them have their absolute counterparts. As explained by Kolm (1976), absolute measures of inequality have some properties different from relative/index measures and those cannot be ignored. However, different measures tend to give different pictures on inequality comparison. If one measure shows that inequality in India in a particular year has fallen in comparison to a previous year, it may be possible to find another measure that shows that inequality has actually increased. Under these circumstances, any researcher in this field tends to choose any one of the available measures, which he feels, the best, and makes the desired comparisons. In this respect, the Gini coefficient/index has been most popular because it seems most convenient to use, though not most convincing. This study tries to use two types of measures of inequality, namely the Gini type and the SD-CV type, simultaneously and tries to derive a general, centrist or intermediate or overall, though sometimes apparently conflicting, impression about the changing pattern of inequality in the distribution of consumer expenditure in rural West Bengal in comparison to rural all India in the period from 1983 to 2012.