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Measuring Inequality in CIS Countries: Theory and Empirics

Author

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  • Rustam Ibragimov
  • Marat Ibragimov
  • Rufat Khamidov

Abstract

Distributions of many variables of interest in developed economic and financial markets, including income and wealth, exhibit heavy tails as in the case of Pareto or power laws. Many commonly used income and wealth inequality measures are very sensitive to extremes and outliers generated by these distributions due to their heavy-tailedness properties. This paper focuses on robust analysis of distributions and heavy-tailedness characteristics for data on income and wealth for the World, Russia and post-Soviet Central Asian economies. Among other results, it provides robust estimates of heavy-tailedness parameters for income and wealth in the markets considered and their comparisons with the benchmark values that are well-established for distributions of these variables in developed economies. The paper further provides applications of the obtained empirical results to inference on inequality measures and discusses their implications for market demand and economic equilibrium.

Suggested Citation

  • Rustam Ibragimov & Marat Ibragimov & Rufat Khamidov, 2010. "Measuring Inequality in CIS Countries: Theory and Empirics," wiiw Balkan Observatory Working Papers 88, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:bpaper:088
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    More about this item

    Keywords

    Income inequality; wealth inequality; CIS countries; Russian economy; post-Soviet economies; heavy-tailedness; power laws; Pareto distribution; income inequality; market demand; economic equilibrium;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

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