Factors Influencing Income Inequality in Thailand

This study examines the factors influencing income inequality and testing the conditional convergence in income inequality of each country in Thailand between 1996-2016 by using the Multivariate Autoregressive State-Space model. This model is an efficient tool in finding the correlation and estimated the missing data with Gaussian error via maximum likelihood using primarily an EM algorithm. Our results show a robust relationship between the economic growth and the change of income inequality in all regions in Thailand, the growth of gross regional product of the whole region have a little relationship with the change of income inequality. The other variables cause a different direction with the change of income inequality which depends on the individual character of each region. In the conditional convergence of income inequality testing, the result shows that income inequality in Bangkok become divergence, more inequality. In contrast, the income inequality of the other regions is getting to steady state income inequality converge. Keywords - Income Inequality, Conditional Convergence, Multivariate Autoregressive State-Space (MARSS) Model.