Trade Liberalization and Income Inequality in India : A Poisson Distributed-Lag Analysis

This paper addresses the relationship between trade liberalization and income inequality among Indian states using a Poisson distributed-lag analysis. Two measures of income inequality are considered: the Gini coefficient and the coefficient of variation. Trade liberalization is proxied using export growth. Results indicate that there is a different pattern of responses in inequality to export growth between rural and urban households. Rural inequality tends to be more responsive in the hoped-for direction than urban inequality