Publication: Reinterpreting Between-Group Inequality
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Date
2008
ISSN
15691721
Published
2008
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We evaluate observed inequality between population groups against a benchmark of the maximum between-group inequality attainable given the number and relative sizes of those groups under examination. Because our measure is normalized by these parameters, drawing comparisons across different settings is less problematic than with conventional inequality decompositions. Moreover, our measure can decline with finer sub-partitioning of population groups. Consequently, the exact manner in which one groups the population acquires greater significance. Survey data from various countries suggest that our approach can provide a complementary perspective on the question of whether (and how much) a particular population breakdown is salient to an assessment of inequality in a country.
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Publication Re-Interpreting Sub-Group Inequality Decompositions(World Bank, Washington, DC, 2005-08)The authors propose a modification to the conventional approach of decomposing income inequality by population sub-groups. Specifically, they propose a measure that evaluates observed between-group inequality against a benchmark of maximum between-group inequality that can be attained when the number and relative sizes of groups under examination are fixed. The authors argue that such a modification can provide a complementary perspective on the question of whether a particular population breakdown is salient to an assessment of inequality in a country. As their measure normalizes between-group inequality by the number and relative sizes of groups, it is also less subject to problems of comparability across different settings. The authors show that for a large set of countries their assessment of the importance of group differences typically increases substantially on the basis of this approach. The ranking of countries (or different population groups) can also differ from that obtained using traditional decomposition methods. Finally, they observe an interesting pattern of higher levels of overall inequality in countries where their measure finds higher between-group contributions.Publication Revisiting Between-Group Inequality Measurement: An Application to the Dynamics of Caste Inequality in Two Indian Villages(2011)Standard approaches to decomposing how much group differences contribute to inequality rarely show significant between-group inequality, and are of limited use in comparing populations with different numbers of groups. We apply an adaptation to the standard approach that remedies these problems to longitudinal household data from two Indian villages-Palanpur in the north and Sugao in the west. In Palanpur we find that the largest Scheduled Caste group failed to share in the gradual rise in village prosperity. This would not have emerged from standard decomposition analysis. However, in Sugao the alternative procedure does not yield any additional insights because income gains have applied relatively evenly across castes.Publication On the Unequal Inequality of Poor Communities(World Bank, Washington, D.C., 2004-02)Important differences exist between communities with respect to their needs, capacities, and circumstances. As central governments are not able to discern these differences fully, they seek to achieve their policy objectives by relying on decentralized mechanisms that use local information. However, household and individual characteristics within communities can also vary substantially. A growing theoretical literature suggests that inequality within communities can influence policy outcomes, and that this influence could be harmful or helpful, depending on the circumstances. Empirical investigations into the impact of inequality have, to date, largely been held back by a lack of systematic evidence on community-level inequality. The authors use household survey and population census data to estimate per capita consumption inequality within communities in three developing countries: Ecuador, Madagascar, and Mozambique. Communities are found to vary markedly from one another in terms of the degree of inequality they exhibit. The authors also show that there should be no presumption that inequality is less severe in poor communities. They argue that the kind of community-level inequality estimates generated in this paper can be used in designing and evaluating decentralized antipoverty programs.Publication On the Unequal Inequality of Poor Communities(World Bank, 2004-09-01)Communities differ in important ways in their needs, capacities, and circumstances. Because central governments are not able to discern these differences fully, they seek to achieve their policy objectives by relying on decentralized mechanisms that use local information. Household and individual characteristics within communities can also vary substantially. A growing body of theoretical literature suggests that inequality within communities can influence policy outcomes in ways that are either harmful or helpful, depending on the circumstances. Until recently, empirical investigations into the impact of inequality have been held back by a lack of systematic evidence on community-level inequality. This study uses household survey and population census data to estimate per capita consumption inequality within communities in three developing economies. It finds that communities vary markedly in their degree of inequality. It also shows that there should be no presumption that inequality is less severe in poor communities. The kind of community-level inequality estimates generated here can be used in designing and evaluating decentralized antipoverty programs.Publication Pre-industrial Inequality(2011)Is inequality largely the result of the Industrial Revolution? Or, were pre-industrial incomes as unequal as they are today? This article infers inequality across individuals within each of the 28 pre-industrial societies, for which data were available, using what are known as social tables. It applies two new concepts: the inequality possibility frontier and the inequality extraction ratio. They compare the observed income inequality to the maximum feasible inequality that, at a given level of income, might have been 'extracted' by those in power. The results give new insights into the connection between inequality and economic development in the very long run.
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