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The distinct feature of Bhutan is its special attention to peace, prosperity and happiness for its people. This research focuses on the expenditure inequality for 2007 and 2012 using various measurements including Gini Coefficients, Theil Indices and Blinder-Oaxaca decomposition. The results show that “between” rather than “within” inequality is the major factor contributing to the overall inequality. Thus, reducing inequality within rural and urban areas, within districts and even among the men and women should be the focus in future endeavors for better equity in the society.

Dynamics and Sources of Expenditure Inequality in Bhutan: Theil and Blinder Oaxaca Decomposition Analysis