Regional redistribution: applying data from household income data

Using data for four countries from the Luxembourg Income Study, this paper evaluates the use of microeconomic data for researching regional income distribution and interregional redistribution. It first estimates interregional inequality, based on household income, before and after redistribution. Two methods of measuring interregional redistribution are then evaluated: the first relies on the percentage reduction in interregional inequality as measured by household income before and after taxes and transfers; the second method uses a simple regressive model to estimate the effect of pre redistribution mean income on post redistribution mean income.