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Inequality at Low Levels of Aggregation in Chile

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Despite success in reducing poverty over the last twenty years, inequality in Chile has remained virtually unchanged, making Chile one of the least equal countries in the world. High levels of inequality have been shown to hamper further reductions in poverty as well as economic growth, and local inequality has been shown to affect such outcomes as violence and health. The study of inequality at the local level is thus crucial for understanding the economic well-being of a country. Local measures of inequality have been difficult to obtain, but recent theoretical advances have enabled the combination of survey and census data to generate estimates of inequality that are robust at disaggregated geographic levels. In this paper, we employ this methodology to produce consistent and precise estimates of inequality for every county in Chile. We find considerable heterogeneity in county-level estimates of inequality, with Gini coefficients ranging from 0.41 to 0.63. An appendix includes estimated inequality for each county so the broader research community may assess the effect of local inequality on a broad range out outcomes, as well as analyze the determinants of inequality itself.

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  • Claudio Agostini & Phillip Brown, 2007. "Inequality at Low Levels of Aggregation in Chile," ILADES-Georgetown University Working Papers inv186, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
  • Handle: RePEc:ila:ilades:inv186
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    1. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
    2. Chris Elbers & Jean O. Lanjouw & Peter Lanjouw, 2003. "Micro--Level Estimation of Poverty and Inequality," Econometrica, Econometric Society, vol. 71(1), pages 355-364, January.
    3. Chris Elbers & Peter F. Lanjouw & Johan A. Mistiaen & Berk Özler & Ken Simler, 2004. "On the Unequal Inequality of Poor Communities," World Bank Economic Review, World Bank Group, vol. 18(3), pages 401-421.
    4. Gindling, T. H. & Robbins, Donald, 2001. "Patterns and Sources of Changing Wage Inequality in Chile and Costa Rica During Structural Adjustment," World Development, Elsevier, vol. 29(4), pages 725-745, April.
    5. Ferreira, Francisco H G & Litchfield, Julie A, 1999. "Calm after the Storms: Income Distribution and Welfare in Chile, 1987-94," World Bank Economic Review, World Bank Group, vol. 13(3), pages 509-538, September.
    6. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
    7. Demombynes, Gabriel & Ozler, Berk, 2005. "Crime and local inequality in South Africa," Journal of Development Economics, Elsevier, vol. 76(2), pages 265-292, April.
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    10. Dante Contreras, 2003. "Poverty and Inequality in a Rapid Growth Economy: Chile 1990-96," Journal of Development Studies, Taylor & Francis Journals, vol. 39(3), pages 181-200.
    11. Rómulo A.Chumacero & Ricardo D.Paredes, 2005. "Characterizing income distribution for poverty and inequality analysis," Estudios de Economia, University of Chile, Department of Economics, vol. 32(1 Year 20), pages 97-117, June.
    12. Amiel, Yoram & Creedy, John & Hurn, Stan, 1999. " Measuring Attitudes towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
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    Keywords

    inequality; poverty mapping; government subsidies; cash transfers; Chile;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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