An analysis of the relationship between income distribution and socio-economic development conditions among communities in the Northwest Terriotories

Abstract

The purpose of this thesis is to test the hypothesis that income inequality is inversely related to socio-economic development conditions at the community level in Canada's Northwest Territories. The theoretical basis for this paper is based on a body of international and regional cross-sectional studies which have suggested that, over time, economic growth results in a higher and more equitable distribution of income, allowing more citizens to benefit. The secondary purpose of this thesis is to determine which aspects of 'development' are most significantly related to income inequality in the study communities.

Two statistical techniques are used in the analysis. Factor analysis is used to collapse a set of development indicators into groups of interrelated factors. Factor scores are then calculated to produce a socio-economic development profile for each community. These development conditions are then mapped to show spatial variations. Using the factor scores as independent variables in a regression equation with an index of income inequality as the dependent variable, the explanatory power of each factor is determined.

The author concludes the thesis with two policy recommendations: (1) educational opportunities must be extended to the small, isolated native villages in the north, and (2) government should subsidize the hunting/trapping economy in the Northwest Territories.