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Top incomes and the measurement of inequality in Egypt


  • Vladimir Hlasny

    (Ewha Womans University, Seoul, Korea)

  • Paolo Verme

    (World Bank)


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.

Suggested Citation

  • Vladimir Hlasny & Paolo Verme, 2013. "Top incomes and the measurement of inequality in Egypt," Working Papers 303, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2013-303

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    References listed on IDEAS

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    Cited by:

    1. Yosr Abid & Cathal O'Donoghue & Denisa Sologon, 2016. "Decomposing Welfare Inequality in Egypt and Tunisia: an Oaxaca-Blinder Based Approach," Working Papers 1015, Economic Research Forum, revised Jun 2016.
    2. Racha Ramadan & Vladimir Hlasny & Vito Intini, 2016. "Inequality Decomposition in the Arab Region: Application to Jordan, Egypt, Palestine and Tunisia," Working Papers 1016, Economic Research Forum, revised Jun 2016.
    3. Lara Ibarra,Gabriel & Martinez Cruz,Adan L., 2015. "Exploring the sources of downward bias in measuring inequality of opportunity," Policy Research Working Paper Series 7458, The World Bank.
    4. Christoph Lakner & Branko Milanovic, 2016. "Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession," World Bank Economic Review, World Bank Group, vol. 30(2), pages 203-232.
    5. Elena Ianchovichina & Lili Mottaghi & Shantayanan Devarajan, "undated". "Middle East and North Africa Economic Monitor, October 2015," World Bank Other Operational Studies 22711, The World Bank.
    6. Facundo Alvaredo & Thomas Piketty, 2014. "Measuring Top Incomes and lnequality in the Middle East: Data Limitations and Illustration with the Case of Egypt," Working Papers 832, Economic Research Forum, revised May 2014.
    7. Nora Lustig, 2016. "Commitment to Equity Handbook. A Guide to Estimating the Impact of Fiscal Policy on Inequality and Poverty," Commitment to Equity (CEQ) Working Paper Series 1301, Tulane University, Department of Economics.
    8. Abu-Ismail Khalid & Sarang Niranjan, 2015. "Rethinking the Measurement of the Middle Class: Evidence from Egypt," WIDER Working Paper Series 023, World Institute for Development Economic Research (UNU-WIDER).
    9. Yosr Abid & Cathal O'Donoghue & Denisa Sologon, 2016. "Exploring the Determinants of Welfare Distribution in Tunisia and Egypt Using a Welfare Generation Model," Working Papers 1009, Economic Research Forum, revised Jun 2016.
    10. Christoph Lakner & Branko Milanovic, 2015. "La distribución global del ingreso. De la caída del muro de Berlín a la gran recesión," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 17(32), pages 71-128, January-J.
    11. Vladimir Hlasny, 2017. "Different Faces of Inequality across Asia: Decomposition of Income Gaps across Demographic Groups," LIS Working papers 691, LIS Cross-National Data Center in Luxembourg.
    12. Ragui Assaad & Caroline Krafft & John Roemer & Djavad Salehi-Isfahani, 2016. "Inequality of Opportunity in Income and Consumption in Egypt," Working Papers 1002, Economic Research Forum, revised May 2016.
    13. Musso, Giorgio, 2015. "Egypt: The Political Economy of a Vicious Circle - Egitto: la political economy di un circolo vizioso," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 68(1), pages 139-152.

    More about this item


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

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East

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