Infrastructure and income inequality: An application to the Brazilian case using hierarchical spatial autoregressive models

Abstract Many scholars have highlighted the role of infrastructure in reducing income inequality. Developing economies present immense regional and income discrepancies, which are correlated with unequally distributed infrastructure in territorial and population terms. In this paper, we assess the effects of infrastructure supply on income inequality and verify whether these effects vary according to the infrastructure sector and its degree of quality and access in Brazil. The analysis is based on spatial hierarchical models. Results allow us to say that infrastructure correlates negatively with income inequality. Hence, policies aimed at improving infrastructure quality and expanding access are crucial for reducing income concentration.