Advanced Search
MyIDEAS: Login to save this paper or follow this series

Is It All About the Tails? The Palma Measure of Income Inequality-Working Paper 343

Contents:

Author Info

  • Alex Cobham, Andy Sumner

    ()

Abstract

The “Palma” is the ratio of national income shares of the top 10 percent of households to the bottom 40 percent, reflecting Gabriel Palma’s observation of the stability of the “middle” 50 percent share of income across countries so that distribution is largely a question of the tails. In this paper we explore the Palma and corroborate the findings that the middle does indeed hold over time and through various stages of tax and transfers. Further, we find that the Gini is almost completely “explained” by only two points of the distribution: the same income shares which determine the Palma. It thus appears that both the Gini and the Palma, in practice, summarize the same information about the income distribution: but only in the case of the Palma is this explicit. This, we argue, makes the Palma a more useful (and intuitive) measure of inequality for policymakers and citizens to track.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cgdev.org/sites/default/files/it-all-about-tails-palma-measure-income-inequality_edit.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Center for Global Development in its series Working Papers with number 343.

as in new window
Length: 42 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:cgd:wpaper:343

Contact details of provider:
Web page: http://www.cgdev.org

Related research

Keywords: inequality; Gini coefficient; Palma;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
  2. Palma, J.G., 2011. "Homogeneous middles vs. heterogeneous tails, and the end of the ‘Inverted-U’: the share of the rich is what it's all about," Cambridge Working Papers in Economics 1111, Faculty of Economics, University of Cambridge.
  3. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198281931, October.
  4. Augustin Kwasi Fosu, 2011. "Growth, Inequality, and Poverty Reduction in Developing Countries: Recent Global Evidence," CSAE Working Paper Series 2011-07, Centre for the Study of African Economies, University of Oxford.
  5. José Gabriel Palma, 2006. "Globalizing Inequality: ‘Centrifugal’ and ‘Centripetal’ Forces at Work," Working Papers, United Nations, Department of Economics and Social Affairs 35, United Nations, Department of Economics and Social Affairs.
  6. Villasenor, JoseA. & Arnold, Barry C., 1989. "Elliptical Lorenz curves," Journal of Econometrics, Elsevier, Elsevier, vol. 40(2), pages 327-338, February.
  7. Shorrocks, Anthony & Wan, Guanghua, 2008. "Ungrouping Income Distributions: Synthesising Samples for Inequality and Poverty Analysis," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2008/16, World Institute for Development Economic Research (UNU-WIDER).
  8. Benito Frosini, 2012. "Approximation and decomposition of Gini, Pietra–Ricci and Theil inequality measures," Empirical Economics, Springer, Springer, vol. 43(1), pages 175-197, August.
  9. Francesca Greselin & Leo Pasquazzi & Ričardas Zitikis, 2013. "Contrasting the Gini and Zenga indices of economic inequality," Journal of Applied Statistics, Taylor & Francis Journals, vol. 40(2), pages 282-297, February.
  10. Juan Antonio Duro, 2008. "Cross-country inequalities in welfare and its decomposition by Sen factors: the virtues of the Theil index," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 1041-1045.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cgd:wpaper:343. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Roodman) The email address of this maintainer does not seem to be valid anymore. Please ask David Roodman to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.