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Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

The Geography of Average Income and Inequality: Spatial Evidence from Austria

Mathias Moser () and Matthias Schnetzer ()
Additional contact information
Mathias Moser: Department of Economics, Vienna University of Economics and Business
Matthias Schnetzer: Austrian Chamber of Labour Vienna

Abstract: This paper investigates the nexus between regional income levels and inequality. We present a novel small-scale inequality database for Austrian municipalities to address this question. Our dataset combines individual tax data of Austrian wage tax payer on regionally disaggregated scale with census and geographical information. This setting allows us to investigate regional spillover effects of average income and various measures of income inequality. Using this data set we find distinct regional clusters of both high average wages and high earnings inequality in Austria. Furthermore we use spatial econometric regressions to quantify the effects between income levels and a number of inequality measures such as the Gini and 90/10 quantile ratios.

Keywords: Regional inequality, spatial dependence, spatial autoregressive model

JEL-codes: C21; D31; J31 November 2014

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