Measuring Inequality through the Strength of Inheritance

Abstract

Can we measure and explain the degree of social inequality in societies simply by measuring, as these papers seek to do, the association between the status or wealth of parents and children? Why would we not measure inequality more directly as the Gini coefficient or the variance of log wealth? The purpose of this comment is to suggest that while the link between parents’ and children’s wealth or status is an important and easily measured determinant of inequality, it will not completely measure inequality or tell us fully about longrun social mobility. Some things about early societies are easy to measure, some very difficult. In societies with labor markets, for example, the material livings standard of the common person is inferable from a few individual wage observations (Clark 2007: 48–49). However, measuring inequality is difficult. Inequality is about variance as opposed to means, and estimating variance requires much more information. The papers of this special section employ a simple alternative measure, b, intended both to parsimoniously estimate early inequality and to document and explain significant increases in inequality with settled agriculture. The reasoning is as follows. Suppose that we measure the logarithm of the wealth of parents relative to average wealth by y0 and that of children by y1. Then, we can estimate with modest amounts of data the parameter b that connects these two measures in the expression