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Public Finance Review
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The Measurement of Interregional Redistribution

G. C. Ruggeri

University of New Brunswick

Weiqiu Yu

University of New Brunswick

This study develops local and global indices to measure interregional redistribution. The local indices compare federal revenues and expenditures assigned to various regions with the pattern of income disparities among regions. They are developed by relating these comparisons under a given regional distribution of federal fiscal activity to three special cases under known degrees of redistribution: no redistribution, the degree of redistribution that would be delivered solely through equal per capita federal spending in each region, and the maximum degree of redistribution that would equalize per capita income in all regions. Global indices are then developed as weighted averages of the local indices. Results show that the federal fiscal system in 1996 delivered a degree of interregional redistribution 1.8 times what would have been generated under equal per capita federal expenditures in each region and nearly half of the maximum redistribution that could have been delivered by the federal fisc.

Key Words: Interregional redistribution • maximum redistribution • federal revenue and expenditures • relative share index • regional income disparities • federal fiscal balances

Public Finance Review, Vol. 31, No. 4, 392-412 (2003)
DOI: 10.1177/1091142103031004003
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