Uncovering the Factors Influencing Income Inequality in Rural Indian Households: A Comprehensive Study

The Department of Economics takes immense pride in announcing the publication of the research paper, “Determinants of Rural Households’ Income Inequality in India” authored by Dr Ghanshyam Pandey, Assistant Professor. The paper has been published in the Journal of Agricultural Economics Research Review (ABDC-C), and has an impact factor of 0.19. Dr Pandey’s paper examines the factors that determine income inequality among rural farm households in India and discusses the implications of the findings for policymakers, practitioners, and researchers. The study highlights how addressing the identified factors could potentially reduce income inequality among rural farm households and improve the overall well-being of the rural population.


This study has identified the drivers of income inequality in rural India using IHDS 2011–12 national-level survey. The inequality decomposition methodology developed by Fields (2003) based on a two-way regression methodology has been used. The study has modified the previous regression based inequality decomposition technique by accounting for diverse income sources and regimes as well as by effectively correcting for selectivity in the various income regimes. The CLAD model has been used to distinguish the determinants of income inequality in rural India. The study has indicated that income inequality in farm households can be attributed to the level of education, family size, caste/social group composition, and composition in land ownership and that family size and land ownership are instrumental primarily due to off-farm labour income. The study has shown that education is a significant factor in income inequality due to its impact on off-farm work income. The study has suggested that a continued increase in variability in land distribution may exacerbate income inequality in households in rural India.

Link to the Article

Pandey G and Devi B (2023). Determinants of rural households’ income inequality in India. (2024). Agricultural Economics Research Review, 36(2), 213-225. https://epubs.icar.org.in/index.php/AERR/article/view/150669

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