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Top incomes and the measurement of inequality in Egypt

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Author Info

  • Vladimir Hlasny

    (Ewha Womans University, Seoul, Korea)

  • Paolo Verme

    (World Bank)

Abstract

By all accounts, income inequality in Egypt is low and had been declining during the decade that preceded the 2011 revolution. As the Egyptian revolution was partly motivated by claims of social injustice and inequalities, this seems at odds with a low level of income inequality. Moreover, while income inequality shows a decline between 2000 and 2009, the World Values Surveys indicate that the aversion to inequality has significantly increased during the same period and for all social groups. This paper utilizes a range of recently developed statistical techniques to assess the true value of income inequality in the presence of a range of possible measurement issues related to top incomes, including item and unit non-response, outliers and extreme observations, and atypical top income distributions. The analysis finds that correcting for unit non-response significantly increases the estimate of inequality by just over 1 percentage point, that the Egyptian distribution of top incomes follows rather closely the Pareto distribution, and that the inverted Pareto coefficient is located around median values when compared with 418 household surveys worldwide. Hence, income inequality in Egypt is confirmed to be low while the distribution of top incomes is not atypical compared with what Pareto had predicted and compared with other countries in the world. This would suggest that the increased frustration with income inequality voiced by Egyptians and measured by the World Values Surveys is driven by factors other than income inequality.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2013-303.pdf
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Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 303.

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Length: 35 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2013-303

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Web page: http://www.ecineq.org
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Related research

Keywords: Top incomes; inequality measures; survey nonresponse; Pareto distribution; parametric estimation; Egypt.;

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  1. repec:hal:journl:halshs-00175929 is not listed on IDEAS
  2. Korinek, Anton & Mistiaen, Johan A. & Ravallion, Martin, 2007. "An econometric method of correcting for unit nonresponse bias in surveys," Journal of Econometrics, Elsevier, vol. 136(1), pages 213-235, January.
  3. repec:hal:cesptp:halshs-00176029 is not listed on IDEAS
  4. Korinek, Anton & Mistiaen, Johan A. & Ravallion, Martin, 2005. "Survey nonresponse and the distribution of income," Policy Research Working Paper Series 3543, The World Bank.
  5. repec:hal:journl:halshs-00176029 is not listed on IDEAS
  6. Frank A. Cowell & Emmanuel Flachaire, 2004. "Income distribution and inequality measurement : the problem of extreme values," Cahiers de la Maison des Sciences Economiques v04101, Université Panthéon-Sorbonne (Paris 1).
  7. Cowell, Frank A. & Victoria-Feser, Maria-Pia, 1996. "Poverty measurement with contaminated data: A robust approach," European Economic Review, Elsevier, vol. 40(9), pages 1761-1771, December.
  8. Davidson, Russell & Flachaire, Emmanuel, 2007. "Asymptotic and bootstrap inference for inequality and poverty measures," Journal of Econometrics, Elsevier, vol. 141(1), pages 141-166, November.
  9. 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.
  10. Cowell, Frank A & Victoria-Feser, Maria-Pia, 1996. "Robustness Properties of Inequality Measures," Econometrica, Econometric Society, vol. 64(1), pages 77-101, January.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Egypt's puzzling income inequality
    by Economic Logician in Economic Logic on 2013-09-24 14:35:00
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Cited by:
  1. Lakner, Christoph & Milanovic, Branko, 2013. "Global income distribution : from the fall of the Berlin Wall to the great recession," Policy Research Working Paper Series 6719, The World Bank.

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