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Is inequality underestimated in Egypt ? evidence from house prices

Author

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  • Van Der Weide,Roy
  • Lakner,Christoph
  • Ianchovichina,Elena

Abstract

Household income surveys often fail to capture top incomes which leads to an underestimation of income inequality. A popular solution is to combine the household survey with data from income tax records, which has been found to result in significant upward corrections of inequality estimates. Unfortunately, tax records are unavailable in many countries, including most of the developing world. In the absence of data from tax records, this study explores the feasibility of using data on house prices to estimate the top tail of the income distribution. In an application to Egypt, where estimates of inequality based on household surveys alone are low by international standards, the study finds strong evidence that inequality is indeed being underestimated by a considerable margin. The Gini index for urban Egypt is found to increase from 36 to 47 after correcting for the missing top tail.

Suggested Citation

  • Van Der Weide,Roy & Lakner,Christoph & Ianchovichina,Elena, 2016. "Is inequality underestimated in Egypt ? evidence from house prices," Policy Research Working Paper Series 7727, The World Bank.
  • Handle: RePEc:wbk:wbrwps:7727
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    Cited by:

    1. 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.
    2. Channing Arndt & Kristi Mahrt, 2017. "Is inequality underestimated in Mozambique? Accounting for underreported consumption," WIDER Working Paper Series 153, World Institute for Development Economic Research (UNU-WIDER).

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    Keywords

    Poverty Diagnostics; Poverty Impact Evaluation; Inequality; Emerging Markets; Income;

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