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A Unified Framework to Measuring Inequality in The Arab Countries

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  • Sami Bibi

    () (Department of Economics, University of Laval, Quebec, Canada)

  • AbdelRahmen El-Lahga

Abstract

The purpose of this paper is to apply a general and unified approach to inequality measurement in Arab countries. To this end, a wide class of inequality indices, proposed by Olmedo et al. (2009) and based on the Bonferroni (1930) curve, rather than the Lorenz curve, is used. When local measures of inequality are aggregated using an appropriate weighting system, familiar indices such as the Gini index can be retrieved. The choice of the weighting system yields a variety of inequality measures that depend on which part of the income distribution the overall inequality index is focused. Our framework offers a reassessment of inequality trends in the Arab world. Our results show that whatever the trend of inequality experienced by the selected Arab countries, the poorest people do not seem to be much affected by the changes in the inequality patterns. For instance, when some countries undergo a rise in overall inequality, changes in the inequality experienced by the poorest population are less pronounced. Inversely, when inequality decreases, the richest percentiles seem to become locally more equal than poorer ones. These findings imply that change in the average income of the poorest is generally very low.

Suggested Citation

  • Sami Bibi & AbdelRahmen El-Lahga, 2010. "A Unified Framework to Measuring Inequality in The Arab Countries," Working Papers 567, Economic Research Forum, revised 11 Jan 2010.
  • Handle: RePEc:erg:wpaper:567
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    References listed on IDEAS

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    1. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
    2. Kolm, Serge-Christophe, 1976. "Unequal inequalities. II," Journal of Economic Theory, Elsevier, vol. 13(1), pages 82-111, August.
    3. Jean-Yves Duclos, 2000. "Gini Indices and the Redistribution of Income," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(2), pages 141-162, March.
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    5. Rolf Aaberge, 2007. "Gini’s nuclear family," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(3), pages 305-322, December.
    6. Sami Bibi & AbdelRahmen El Lahga, 2010. "Generating Reliable Data to Perform Distributional Analysis in the Arab Region," Working Papers 561, Economic Research Forum, revised 10 Jan 2010.
    7. Kolm, Serge-Christophe, 1976. "Unequal inequalities. I," Journal of Economic Theory, Elsevier, vol. 12(3), pages 416-442, June.
    8. Shlomo Yitzhaki, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, Oxford University Press, vol. 93(2), pages 321-324.
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    11. Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-335, December.
    12. Rolf Aaberge, 2000. "Characterizations of Lorenz curves and income distributions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(4), pages 639-653.
    13. John D. Hey & Peter J. Lambert, 1980. "Relative Deprivation and the Gini Coefficient: Comment," The Quarterly Journal of Economics, Oxford University Press, vol. 95(3), pages 567-573.
    14. Yaari, Menahem E., 1988. "A controversial proposal concerning inequality measurement," Journal of Economic Theory, Elsevier, vol. 44(2), pages 381-397, April.
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    1. repec:wsi:medjxx:v:03:y:2011:i:01:n:s179381201100034x is not listed on IDEAS
    2. Sami Bibi & AbdelRahmen El-Lahga, 2010. "Decomposing Income Inequality in The Arab Region," Working Papers 557, Economic Research Forum, revised 10 Jan 2010.
    3. Sami Bibi & AbdelRahmen El-Lahga, 2011. "A Unified Framework to Decomposing Inequality with Illustrations to Some Arab Countries," Working Papers 618, Economic Research Forum, revised 08 Jan 2011.

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