| Summary: | This study aims to explore educational differences and urban expenditure
inequality in Indonesia by using the Theil indices based on household expenditure data from the National Socioeconomic Survey of year 2008. The results of analysis showed that there was a substantial decline in overall inequality from 0,370 in 2005 to 0,263 in 2008 and as expected, the urban sector had much larger inequality and mean per capita household expenditure than the rural sector. The urban sector contributed 62.4% to overall inequality, while the rural sector contribution was 24.7%. The findings !Tom decomposing educational groups gave evidence that the tertiary group had the highest within-group inequality in Indonesia
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