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The short-run impact of the stock market appreciation of the 1980s and 1990s on U.S. income inequality

  • Zietz, Joachim
  • Zhao, Xiaolin

The paper uses 1980 to 2000 Panel Study of Income Dynamics (PSID) data to study the short-run effect of a stock market appreciation on U.S. household income inequality. Fixed-effects regressions suggest that a stock market appreciation raises the incomes of stockholder households more than non-stockholder households. The Gini coefficients derived from the regressions reveal a perceptible but rather volatile increase that can be attributed to the stock market appreciation, especially for the latter parts of the 1980s and 1990s. When averaged by decade, the stock market appreciation raises the Gini coefficient by about 2% for the 1980s and by 3% for the 1990s.

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Article provided by Elsevier in its journal The Quarterly Review of Economics and Finance.

Volume (Year): 49 (2009)
Issue (Month): 1 (February)
Pages: 42-53

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Handle: RePEc:eee:quaeco:v:49:y:2009:i:1:p:42-53
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620167

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