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Evaluating the Evidence on Income Inequality in Australia in the 2000s

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  • Roger Wilkins

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

Published ABS data from the Survey of Income and Housing (SIH) show a substantial increase in income inequality between 2001 and 2010. However, almost all of the increase occurred over a period when changes in survey methodology and income concept were occurring. I document these changes, present results of analysis of the SIH unit record data, and present independent evidence on income inequality trends using the HILDA Survey, tax records and National Accounts. I conclude that the SIH overstates the growth in income inequality, even when the income variable examined is notionally consistently defined across surveys. The extent of overstatement is uncertain, however, reflecting ambiguity about the nature and extent of changes to the distribution of household market income.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2013n26.

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Length: 59pp
Date of creation: Jul 2013
Date of revision:
Handle: RePEc:iae:iaewps:wp2013n26

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Keywords: Income inequality; household surveys; decomposition;

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References

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  1. Barrett, Garry F & Crossley, Thomas F & Worswick, Christopher, 2000. "Consumption and Income Inequality in Australia," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 76(233), pages 116-38, June.
  2. George Athanasopoulos & Farshid Vahid, 2002. "Statistical Inference on Changes in Income Inequality in Australia," Monash Econometrics and Business Statistics Working Papers, Monash University, Department of Econometrics and Business Statistics 9/02, Monash University, Department of Econometrics and Business Statistics.
  3. Mark Wooden & Simon Freidin & Nicole Watson, 2002. "The Household, Income and Labour Dynamics in Australia (HILDA)Survey: Wave 1," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 339-348.
  4. Ann Harding, 1995. "The Impact of Health, Education and Housing Outlays upon Income Distribution in Australia in the 1990s," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 28(3), pages 71-86.
  5. Peter Saunders & Bruce Bradbury, 2006. "Monitoring Trends in Poverty and Income Distribution: Data, Methodology and Measurement," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 82(258), pages 341-364, 09.
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Cited by:
  1. Amy Beech & Rosetta Dollman & Richard Finlay & Gianni La Cava, 2014. "The Distribution of Household Spending in Australia," RBA Bulletin, Reserve Bank of Australia, pages 13-22, March.

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