Decomposing inequality in research funding by university-institute sub-group: A three-stage nested Theil index

The inequality in research funding is an important issue, in which the measurement of inequality is the basis. The literature has mostly investigated the inequality in research funding by providing overall values of inequality but has rarely explored this topic through the internal structure of the overall inequality. In this paper, a three-stage nested Theil index is employed to decompose the overall inequality in research funding into the between and within components. Moreover, a decomposition framework of university-institute sub-group is constructed to investigate the inherent structure of overall inequality in research funding. The data from the National Natural Science Foundation of China between 2013 and 2017 at the individual researcher level are collected as empirical data. The empirical results indicate that the overall Theil index of research funding in China is 1.97 (equal to 0.87 in the Gini index), a value higher than in the United States but lower than in Japan. The decomposition results regarding the inequality in research funding indicate that the inequality within institutions dominates and contributes 80.0% of the overall inequality. Moreover, ‘Universities’ contributes more than ‘Institutes’ to the inequality, and the ‘World-class universities’ contributes the most among the six groups of the Within-B component.