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Recovering Within-Country Inequality From Trade Data

Author

Listed:
  • Dorothee Hillrichs

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Gonzague Vannoorenberghe

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

This paper develops a novel method to estimate inequality within a country based on what it imports. If preferences are non-homothetic, rich and poor individuals in a country have different consumption profiles. Observing imports can thus inform us about the income distribution in a country. The global availability of trade data allows us to estimate inequality using the same transparent and comparable method for a large sample of countries over time. Compared to conventional data, we feature an especially good coverage of developing countries. We provide a number of robustness checks and cross-validation exercises to gauge the performance of our method.

Suggested Citation

  • Dorothee Hillrichs & Gonzague Vannoorenberghe, 2021. "Recovering Within-Country Inequality From Trade Data," LIDAM Discussion Papers IRES 2021014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2021014
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    File URL: https://sites.uclouvain.be/econ/DP/IRES/2021014.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    International trade; Inequality; Non-homothetic preferences;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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