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Do infrastructure development and urbanisation lead to rural-urban income inequality Evidence from some Asian countries

This empirical analysis aspires to unearth the nexus between infrastructure development, urbanisation, and rural-urban income inequality in Asian perspective by reasonably using panel data of nine Asian countries for the specific period of 1991 to 2016. The precise result of panel dynamic ordinary least squares (OLS) proffers that some proxies of infrastructure development like electric power, transport as well as telecommunication lead to a potential reduction in rural-urban income disparity while on the other hand, the water and sanitation access escalate the same. The key variables such as urbanisation and inflation lead to inequality in these specific countries. The ultimate outcome of causality unearths the evidence of unidirectional causality running from inflation to rural-urban income imparity, and bidirectional from urbanisation to rural-urban income inequality. Additionally, it also reveals that there is no causality running from any of the latent variables of infrastructure development towards the inequality or vice-versa.