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Kuznets's hypothesis and the data constraint

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  • Argentino Pessoa

Abstract

Five decades ago, Simon Kuznets expressed an important hypothesis about the relationship between the degree of income inequality within a country and its level of economic development: the Kuznets's inverted-U hypothesis. The lack of longitudinal data has forced the use of cross-section or pooled datasets in order to draw conclusions about that relationship. In the present note we highlight the lack of international comparability of surveys where the measures of inequality are based, and we show two main findings: (1) data comparability goes on constituting a problem, particularly in what respects to the different welfare indicators used in national surveys, and (2) the procedure usually used to minimize the problem of noncomparability is likely to enforce the bias rather than to solve it.

Suggested Citation

  • Argentino Pessoa, 2009. "Kuznets's hypothesis and the data constraint," Applied Economics Letters, Taylor & Francis Journals, vol. 16(8), pages 813-818.
    • Handle: RePEc:taf:apeclt:v:16:y:2009:i:8:p:813-818
    DOI: 10.1080/13504850701221881
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    1. World Bank, 2006. "World Development Indicators 2006," World Bank Publications - Books, The World Bank Group, number 8151.
    2. Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101, April.
    3. A.B. Atkinson & F. Bourguignon (ed.), 2000. "Handbook of Income Distribution," Handbook of Income Distribution, Elsevier, edition 1, volume 1, number 1.
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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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