Inequality Measures Research Articles

Foreign aid and inequality: Do conflicts matter?

Existing literature on the relationship between foreign aid and income inequality (inequality) is inconclusive and the role of conflict has been underexplored. Yet, the frequency and severity of conflicts in Sub-Saharan Africa (SSA) have increased sharply in recent years. This study investigates the impact of foreign aid on inequality in SSA, focusing on the moderating role of conflicts. Using a sample of 41 SSA countries from 1989 to 2022, we employ fixed-effects and System GMM to explore the complex interplay between foreign aid, conflicts and inequality. The results suggest that foreign aid reduces inequality, but that its effectiveness is considerably reduced in conflict-ridden countries. The results confirm the harmful effect of conflict in the foreign aid-inequality nexus in SSA. Results are robust to many robustness checks, such as the alternative strategy, which combines alternative inequality and conflict measures. Our results suggest that promoting good governance by fighting corruption and preventing conflict can enable foreign aid to significantly reduce inequality in SSA.

Inequality and risk preference

AbstractThis paper studies the relationship between income inequality and risk taking. Increased income inequality is likely to enlarge the scope for upward comparisons and, in the presence of reference-dependent preferences, to increase willingness to take risks. Using a globally representative data set on risk preference in 76 countries, we empirically document that the distribution of income in a country has a positive and significant link with the preference for risk. This relationship is remarkably precise and holds across countries and individuals, as well as alternate measures of inequality. We find evidence of a steeper gradient between willingness to take risks and inequality for cognitively more able individuals who likely have a better assessment of inequality and for those who are dissatisfied with their income. We present results in favour of our mechanism, which suggests that falling behind one’s reference group increases the appetite for risk taking.

Fighting Inequality Through a Progressive Tax System for a Just Future in Tanzania

The problem of inequality is one of the economic problems that developing countries still face including Tanzania. This research therefore focuses on presenting the status and trends of inequality and the progressive tax system to pay for a just future in Tanzania. Research was anchored on the Ability-to-Pay Principle. The study was typically a desk research whereby it dwelled on analyzing and synthesizing large amounts of complex secondary data/information and literature concerning the issue of inequality in Tanzania. The target population for this study consists of secondary data sources, which included Peer-reviewed journal articles on taxation and inequality Government reports and taxation data from the Tanzania Revenue Authority (TRA). A purposive sampling methodology was employed to choose relevant studies and reports. This approach ascertained that only sources directly related to the research goals were included. The sample consisted of 20 sources, selected based on criteria such as: Year of publication. Content analysis was adopted in analyzing data to discover themes, patterns and trends related to progressive tax systems, income inequality reduction, and wealth distribution. Key variables such as tax policies, inequality measures (Gini coefficient), and wealth distribution patterns were extracted and analyzed to determine the effectiveness of progressive taxation in Tanzania. Findings revealed that while progressive taxes can be a remedy, the presence of large informal sectors, as in Tanzania, hinder their reach. Thus, while Tanzania’s progressive tax structure holds potential, more reforms are in need to boost implementation alongside widening the tax base. Further, the study concluded that there is little wealth-related taxation in Tanzania. Also, assets such as land ownership or financial assets are hardly/not taxed. The study recommended that given the situation, there is a great need to improve the tax collection with a focus on the existing tax base in Tanzania.

The Impact of Restrictive Macroprudential Policies through Borrower-Targeted Instruments on Income Inequality: Evidence from a Bayesian Approach

This study used the panel data from 15 emerging markets to examine the impact of restrictive macroprudential policies on income inequality from 2000–2019 using Bayesian panel vector autoregression and Bayesian panel dynamics generalised method of moments models. The chosen models are suitable for addressing multiple entity dynamics, accommodating a wide range of variables, handling dense parameterisation, and optimising formativeness and heterogeneous individual-specific factors. The empirical analysis utilised various macroprudential policy proxies and income inequality measures. The results show that when the central banks tighten systems using macroprudential policy instruments to sticker debt-to-income and financial instruments for lower-income borrowers (the bottom 40% of the income distribution), they promote income inequality in these countries while reducing income inequality for high-income borrowers (the high 1 percent of the income distribution). The impact of loan-to-value ratios was found to be insignificant in these countries. Fiscal policy through government expenditure and economic development reduces income inequality, while money supply and oil-price shocks exacerbate it. The study suggests implementing a progressive debt-to-income (DTI) ratio system in emerging markets to address income inequality among lower-income borrowers. This would adjust DTI thresholds based on income brackets, allowing lenient credit access for lower-income borrowers while maintaining stricter limits for higher-income borrowers. This would improve financial stability and reduce income disparities. Additionally, targeted financial literacy programs and a petroleum-linked basic income program could be implemented to distribute oil revenue to lower-income households. A monetary supply stabilisation fund could also be established to maintain financial stability and prevent excessive inflation.

Associations between changes in deprivation and alcohol use disorder: a nationwide longitudinal study.

Despite conflicting findings on the association between socioeconomic status and drinking, little is known about the impact of deprivation as a measure of inequality on alcohol use disorders (AUDs). We used the Korea Welfare Panel Study, a longitudinal survey conducted from 2012 to 2022, and included 1569 Korean adult participants. Deprivation (at least one including food, housing, medical, educational, and credit deprivation) was measured by self-report and divided into four categories according to the change in deprivation experience from the previous year to the following year. AUD was measured using the Korean version of the Alcohol Use Disorders Identification Test scale. Multivariable logistic regression was used to estimate odds ratios and 95% confidence intervals and adjusted for confounders. Among 1569 participants, worsened deprivation and consistent deprivation were positively associated with AUD compared to non-deprivation. In particular, worsened deprivation was more likely to be associated with AUD in participants with low household income, high school education level, and economic activity. We found that worsened deprivation and consistent deprivation were associated with AUD. Deprivation should be considered as a health policy intervention to improve drinking problems.

Inequalities in the use of dental services by people with and without disabilities in Brazil: a National Health Survey.

The present cross-sectional study aimed to evaluate if social, racial, and gender inequalities disproportionally affect the use of dental services by people with and without disabilities in Brazil in the year 2013. The study used data from the 2013 National Health Survey and the dependent variable was the use of dental services. The outcome was stratified by gender, race, and social variables. Descriptive analysis was represented by absolute and relative frequencies. Two inequality measures were used to investigate the inequalities: the Slope Index of Inequalities (SII) and the Concentration Index of Inequalities (CIX). The SII expresses the absolute difference and the CIX identifies the relative inequality. Of 145,580 adults evaluated, 7.7% reported disability. The proportion of adults without disabilities who used dental services in the last 12 months was higher (45.2%; 95%CI 44.2-46.1) than adults with disabilities (33.9%; 95%CI 32.0-35.9). There was an absolute difference of 40% points (SII 0.40; CI95% (0.36-0.45) in the use of dental services between poorer and richer people with disabilities. Absolute and relative inequalities were identified in the use of dental services, considering the education of the head of the family and family income, with similar results for people with and without disabilities. High inequality is observed concerning race. Racial minorities (Black, Brown, Yellow, and Indigenous) without disabilities presented a higher use of dental services in the last 12 months than racial minorities with disabilities. Our findings demonstrate that social and racial inequities negatively affect individuals with and without disabilities. Inequalities exist in the use of oral health services for people with and without disabilities.

Assessing the Reliability and Calibration of the Gini Coefficient

This research paper delves into the Gini Coefficient, a widely used statistical measure of income inequality. We assess the accuracy and reliability of this tool by examining its strengths, such as its simplicity and applicability across countries, alongside its limitations, including sensitivity to data variations and contextual differences. The paper explores how the Gini Coefficient is utilized in economics and policy analysis, providing a balanced view of its advantages and drawbacks, ultimately evaluating its effectiveness in capturing the complexities of income distribution.

Income inequality, unemployment, and government transfer: what do their dynamics tell us

PurposeIn this research, we explore the dynamics among measures of income inequality in the USA, male and female unemployment rates and growth in government transfer using time series data.Design/methodology/approachThis research adopts a macro-econometric approach to estimate a structural VAR model using time series data.FindingsOur structural impulse responses found that growth in government transfer increases unemployment rates for both males and females. Female income inequality declines with increased government transfer. When the female income ratio rises, we observe that government transfer outlays fall over the forecast horizon. Variance decomposition finds that growth in government transfers is impacted by the male unemployment rate relatively more than the female unemployment rate. This research, therefore, suggests gender-specific government transfers to reduce income inequality. This, in effect, may reduce government transfer outlays over time.Practical implicationsThis research, therefore, suggests gender-specific government transfers to reduce income inequality. This, in effect, may reduce government transfer outlays over time.Originality/valueThis research investigates the dynamics among income inequality, government transfer and unemployment rates. There is a dearth of research articles that adopt a macro-econometric in this area.

Measuring Historical Inequality in Germany

Abstract This article surveys the measurement of historical wealth and income inequality in Germany. We discuss the underlying data sources, the challenges they pose, and the opportunities they create. We also identify two promising avenues for future research. First, we argue that the geographic granularity of German historical statistics provides researchers with the opportunity to investigate the causes of inequality. Second, several dimensions of historical inequality remain under-explored, for example, the equalizing role of welfare state institutions such as public pensions.

Wealth polarization in western countries

This paper delves into the dynamics of wealth distribution across various countries, utilizing innovative methodologies to uncover patterns of wealth polarization and its determinants. Wealth, distinct from income, reflects long-term economic resources and serves as a crucial indicator of economic well-being. Employing the "relative distribution" method and Recentered Influence Function (RIF) regression, this study examines changes in wealth distribution and the factors driving wealth polarization across eight European countries, Australia, and the United States.The analysis reveals significant heterogeneity in wealth distribution trends among countries, with disparities observed over time. Wealth polarization, akin to income polarization, emerges as a phenomenon distinct from traditional measures of inequality, shedding light on the concentration of wealth within societies. Household composition, demographic factors, and socioeconomic characteristics significantly influence wealth polarization, echoing patterns observed in income polarization studies.The findings underscore the multifaceted nature of wealth distribution dynamics and highlight the need for comprehensive policy interventions to address wealth inequality and polarization. Policy measures such as progressive taxation, regulatory reforms, and asset-building programs for marginalized communities are crucial in fostering equitable wealth distribution and creating inclusive societies.

Trends and inequalities in antenatal care coverage in Benin (2006–2017): an application of World Health Organization’s Health Equity Assessment Toolkit

IntroductionBetween 2006 and 2017, antenatal care (ANC) coverage in Benin declined, potentially exacerbating inequalities and substantiating the need for health inequality monitoring. This study examines inequalities in ANC attendance in Benin, disaggregated by women’s age, educational level, economic status, place of residence, region of residence, and the extent to which they have changed over time.MethodsThree rounds of the Benin Demographic and Health Surveys (2006, 2011–12, and 2017–18) were analyzed to examine inequalities in ANC coverage. An exploratory descriptive approach was adopted for the analysis. Simple [difference (D) and ratio (R)] and complex [population attributable risk (PAR) and population attributable fraction (PAF)] measures of inequalities were computed using the World Health Organization’s Health Equity Assessment Toolkit (WHO’s HEAT) online platform. The measures were computed separately for each of the three surveys, and their estimates were compared.ResultsThe findings revealed an 8.4% decline in at least four ANC visits between 2006 and 2017–18. The decline occurred irrespective of age, educational status, economic status, place of residence, and region. Region-related inequalities were the largest and increased slightly between 2006 (D = 54.6; R = 2.6; PAF = 47.8, PAR = 29.0) and 2017–18 (D = 55.8; R = 3.1; PAF = 57.2, PAR = 29.8). Education (2006: D = 31.3, R = 1.6, PAF = 40.5, PAR = 24.5; 2017–18: D = 25.2, R = 1.6, PAF = 34.9, PAR = 18.1) and rural-urban (2006: D = 16.8, R = 1.3, PAF = 17.8, PAR = 10.8; 2017–18: D = 11.2, R = 1.2, PAF = 13.1, PAR = 6.8) inequalities reduced while economic status inequalities did not improve (2006: D = 48, R = 2.2, PAF = 44.5, PAR = 26.9; 2017–18: D = 43.9, R = 2.4, PAF = 45.0, PAR = 23.4). Age inequalities were very minimal.ConclusionANC inequalities remain deeply ingrained in Benin. Addressing their varying levels requires comprehensive strategies that encompass both supply—and demand-side interventions, focusing on reaching uneducated women in the poorest households and those residing in rural areas and Atacora.

On the decomposition of the extensions of the Gini index that are based on the ‘metallic’ sequences of number theory

AbstractThe present paper extends the work of Subramanian (Econ Bull 41(4):2309–2319, 2021), as well as that of Creedy and Subramanian (Exploring a new class of inequality measures and associated value judgements: Gini and Fibonacci-type sequences, 2022), by showing how this new extension of the Gini index may be decomposed by income sources, income classes and population subgroups. It also gives an empirical illustration applying this extension of the Gini index to the analysis of the inequality in expenditure on social protection among European countries in 2018. In the decomposition by benefit function it appears that the housing function consistently exhibits the smallest contribution, due to its low expenditure weight, while the old-age function has the lowest inequality but the highest contribution, due to its substantial expenditure weight. The family/children function's contribution increases when a higher weight is given to lower expenditures, highlighting a pronounced inequality at lower expenditure levels. Conversely, the old-age function shows higher inequality among countries with higher expenditures. In the breakdown by welfare systems, we observe greater inequality between systems than within them.

Underestimating the Pandemic: The Impact of COVID-19 on Income Distribution in the U.S. and Brazil

The COVID-19 pandemic has exposed individuals to various risks, including job loss, income reduction, deteriorating well-being, and severe health complications and death. In Brazil and the U.S., as well as in other countries, the initial response to the pandemic was marked by governmental underestimation, leading to inadequate public health measures to curb the spread of the virus. Although progressively mitigated, this approach played a crucial role in the impacts on local populations. Therefore, the principal aim of this paper is to evaluate the impact of COVID-19 and, indirectly, of the policies adopted by the U.S. and the Brazilian governments to prevent pandemic diffusion on income distribution. Utilizing available microdata and employing novel econometric methods (RIF-regression for inequality measures) this study shows that growth in COVID-19 prevalence significantly exacerbates economic disparities. Furthermore, the impact of COVID-19 on inequality has increased over time, suggesting that this negative impact has been intensifying. In the U.S., results indicate that working from home, the inability to work, and barriers to job-seeking significantly increase inequalities. Although further data are necessary to validate the hypothesis, this preliminary evidence suggests that the pandemic has significantly contributed to increased inequality in these two countries already characterized by increasing polarization and significant social disparities.

From consumption to context: assessing poverty and inequality across diverse socio-ecological systems in Ghana

Local social and ecological contexts influence the experience of poverty and inequality in a number of ways that include shaping livelihood opportunities and determining the available infrastructure, services and environmental resources, as well as people’s capacity to use them. The metrics used to define poverty and inequality function to guide local and international development policy but how these interact with the local ecological contexts is not well explored. We use a social-ecological systems (SES) lens to empirically examine how context relates to various measures of human well-being at a national scale in Ghana. Using a novel dataset constructed from the 100% Ghanian Census, we examine poverty and inequality at a fine population level across and within multiple dimensions of well-being. First, we describe how well-being varies within different Ghanian SES contexts. Second, we ask whether monetary consumption acts a good indicator for well-being across these contexts. Third, we examine measures of inequality in various metrics across SES types. We find consumption distributions differ across SES types and are markedly distinct from regional distributions based on political boundaries. Rates of improved well-being are positively correlated with consumption levels in all SES types, but correlations are weaker in less-developed contexts like, rangelands and wildlands. Finally, while consumption inequality is quite consistent across SES types, inequality in other measures of living standards (housing, water, sanitation, etc) increases dramatically in SES types as population density and infrastructural development decreases. We advocate that SES types should be recognized as distinct contexts in which actions to mitigate poverty and inequality should better incorporate the challenges unique to each.

Where You Sit Is Where You Stand: Perceived (In)Equality and Demand for Democracy in Africa

In this paper, I explore whether perceived individual inequality is associated with popular demand for democracy in 33 African countries. Past research has diverged on whether individual-level inequality should increase or decrease support for democracy, with some arguing that people might see democracy as a solution to inequality, and others that people might see it as a cause. Much of this research however uses country- level measures of inequality. Recent research however increasingly suggests that such country-level scores of inequality insufficiently capture how ordinary people perceive levels of inequality. I advance our understanding of co-variates of demand for democracy by using a perceptual measure of inequality from the Afrobarometer survey: how people feel their living situation compares to others in their country. I find that perceived relative equality is significantly associated with greater demand for democracy, while perceptions of both relative deprivation and relative advantage are significantly associated with lower democratic demand. These effects are largely significant above and beyond the effect of absolute poverty and known predictors of demand for democracy, such as free and fair elections and level of education.

Social trust and COVID-19 mortality in the United States: lessons in planning for future pandemics using data from the general social survey

BackgroundThe United States has lost many lives to COVID-19. The role of social capital and collective action has been previously explored in the context of COVID-19. The current study specifically investigates the role of social trust at the county level and COVID-19 mortality in the US, hypothesizing that counties with higher social trust will have lower COVID-19 mortality rates.MethodsWe used cross-sectional data from the General Social Survey (GSS). We collected COVID-19 mortality data from the COVID-19 Dashboard by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University until October 31, 2021. We obtained county characteristics from the 2019 American Community Survey and supplemented this data source with additional publicly available county-level data, such as measures of income inequality and political leanings. We measured social trust as a single item from the GSS and calculated mean social trust in a county by pooling responses from 2002 to 2018. We then modeled the relationship between mean social trust and COVID-19 mortality.ResultsResults indicate that counties with higher social trust have lower COVID-19 mortality rates. Higher values of mean social trust at the county level are associated with a decrease in COVID-19 mortality (b= -0.25, p-value < 0.001), after adjustment for confounding. The direction of association is consistent in a sensitivity analysis.ConclusionsOur findings underscore the importance of investment in social capital and social trust. We believe these findings can be applied beyond the COVID-19 pandemic, as they demonstrate the potential for social trust as a method for emergency preparedness.

Poverty and Inequality in Jammu and Kashmir: A Sensitivity Analysis

The importance of adult equivalence and economies of scale in the estimation of poverty and inequality are well-established. Empirical investigations have validated that all measures of poverty and inequality are sensitive to various choices of equivalence scales. The current research attempts to examine the effects of equivalence scales on poverty and inequality measurement within the region of Jammu and Kashmir (J&amp;K) in order to validate whether poverty estimates are sensitive to these scales or not. Despite being industrially backward and politically fragile, J&amp;K reflects better economic indicators than most other Indian states. The findings of the current study validate the same. The application of adult equivalence generates mixed results, and the economies of scale highlight the fact that standard measures of poverty and inequality are overstated. Most importantly, welfare rank reversal takes place when household size and gender of the household are tested for. JEL Codes: D63, I32, P43

Good for the goose, bad for the gander? Corruption and income inequality

AbstractWe examine the relationship between corruption and income inequality across countries. While previous studies have explored this association at both an international and within‐country level, we expand on this literature in two distinct ways. First, along with the most commonly utilized measure of inequality (Gini coefficients), we also examine income per‐capita at each decile, along with top 1% and 5%, and the associated income shares. Second, we employ an empirical strategy that differs from the existing literature. Our primary results are estimated using matching methods, but we also supplement these results with a “doubly robust” difference‐in‐difference design. We find that a reduction in corruption increases incomes of the top 80% but does not significantly impact incomes of the bottom 20%, or the top 1% and 5%. We find some evidence of income growth amongst the top 1% and 5% following increases in corruption, but these results are inconsistent across estimations. Our results also suggest that accounting for the size of the informal sector matters a great deal in understanding the relationship between corruption and the distribution of income.

Economic Inequality, Life Expectancy, and Interpersonal Violence in London Neighborhoods.

Positive associations between levels of socioeconomic inequality and homicide rates have been reported at various geographical levels (e.g., between countries, states, cities, and neighborhoods within a city). However, the extent to which inequality predicts levels of non-lethal violence has been less frequently studied. The present study was conducted to investigate the association between socioeconomic inequality and levels of non-lethal interpersonal violence across neighborhoods of London during the period 2010 to 2012, using two independent data sources: Metropolitan Police service recorded violent crime and London Ambulance Service recorded assaults. Mean income per person and local life expectancy were included as additional predictors. Following exclusions due to census boundary changes, across 533 London wards, there were positive bivariate associations between both violence measures and a measure of inequality between neighborhoods (census lower layer super output areas [LSOAs]) within a ward. Moreover, there were negative bivariate associations between violence rates and both ward mean income and life expectancy measures for males and females. However, in a regression analysis only inequality and male life expectancy were consistent predictors of rates of interpersonal violence across outcome measures. The results of the present study provide further evidence of an association between levels of economic inequality and rates of interpersonal violence. The findings, for variation in rates of non-lethal violence across small geographical areas (neighborhoods), build on previous research that has mostly focused on rates of lethal violence and has tended to use aggregate measures across larger geographical areas.

Avalanche dynamics in nonconservative water droplet

The self-organized criticality (SOC) exhibits excellent performance in describing the dynamic features of multi-body systems in nature. It is usually considered that conservative law is a necessary condition for the existence of SOC. However, mass or energy dissipation typically exists in the process from self-organization to a critical state in natural systems such as earthquakes and air pollution, namely, non-conservation. At present, few physical experiments have systematically explored the SOC behavior in a non-conservative system, compared to numerical simulations. This study is the first to design a non-conservative sandpile experiment using water droplets. Based on this experiment, the dynamic evolution process of avalanches in a non-conservative system has been analyzed. The results show that the avalanche size of water droplets follows a power-law distribution, as the water mass decays with time. This phenomenon obeys the rules of scale-free distribution, which is consistent with SOC behavior. Moreover, the waiting time of water droplets avalanche follows a stretched exponential distribution. These results suggest that SOC behavior still exists in non-conservative multi-body systems, which is affected by the decay coefficient. We then explore the mechanism by which the decay coefficient affects the transition of the system to a critical state in the non-conservative sandpile model (NBTW). We find that only when the decay coefficient is small do the inequality measures, Gini coefficient g and Kolkata index k, exhibit nearly universal values, similar to the mechanism of the system transitioning to a critical state in the traditional BTW model. When the decay coefficient is large, the NBTW model shows scaling-limited effects and the scaling exponent of avalanche size increases with the decay coefficient. Furthermore, we use the NBTW model to study how the decay coefficient influences the scaling exponent of avalanche size. We find that the NBTW model can effectively explain the variability of scaling exponents observed in different SOC systems and establish a quantitative relationship between the mass decay coefficient and the avalanche size scaling exponent. This study provides new insight into SOC behavior in non-conservative systems in nature.