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What's Behind the Inequality We Measure? An Investigation Using Latin American Data

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  • Miguel SzEkely
  • Marianne Hilgert

Abstract

The use of income distribution indicators in the economics literature has increased considerably in recent years. Using household surveys from 18 Latin American and Caribbean countries, this article seeks to explore what is behind the numbers, and what information they convey. We find that the way in which countries rank according to inequality measured in a conventional way is, to a large extent, an illusion created by differences in characteristics of the data and on the particular ways in which the data are treated. Our main conclusion is that there is an important story behind each number. This story influences our judgment about how unequal countries are, but it is seldom told or understood. Perhaps other statistics commonly used in economics also have their own interesting story, and it might be worth trying to find out what it is.

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  • Miguel SzEkely & Marianne Hilgert, 2007. "What's Behind the Inequality We Measure? An Investigation Using Latin American Data," Oxford Development Studies, Taylor & Francis Journals, vol. 35(2), pages 197-217.
    • Handle: RePEc:taf:oxdevs:v:35:y:2007:i:2:p:197-217
    DOI: 10.1080/13600810701427626
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    Cited by:

    1. Alvaredo, Facundo & Bourguignon, François & Ferreira, Francisco H. G. & Lustig, Nora, 2023. "Seventy-five years of measuring income inequality in Latin America," LSE Research Online Documents on Economics 120557, London School of Economics and Political Science, LSE Library.
    2. Wannaphong Durongkaveroj, 2018. "Tolerance for inequality: Hirschman's tunnel effect revisited," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(7), pages 1240-1247, October.
    3. Sámano, Claudia & Szekely, Miguel, 2012. "Did Trade Openness Affect Income Distribution in Latin America? Evidence for the Years 1980-2010," WIDER Working Paper Series 003, World Institute for Development Economic Research (UNU-WIDER).
    4. Hai-Anh H. Dang & Peter F. Lanjouw, 2016. "Toward a New Definition of Shared Prosperity: A Dynamic Perspective from Three Countries," International Economic Association Series, in: Kaushik Basu & Joseph E. Stiglitz (ed.), Inequality and Growth: Patterns and Policy, chapter 5, pages 151-171, Palgrave Macmillan.
    5. Carlos Rodriguez-Castelan & Luis F. Lopez-Calva & Nora Lustig & Daniel Valderrama, 2016. "Understanding the Dynamics of Labor Income Inequality in Latin America," Working Papers 1608, Tulane University, Department of Economics.
    6. Carlos de la Espriella, 2009. "A Technique for Small-area Poverty Analyses," Urban Studies, Urban Studies Journal Limited, vol. 46(11), pages 2399-2421, October.
    7. Carlos Rodríguez‐Castelán & Luis Felipe López‐Calva & Nora Lustig & Daniel Valderrama, 2022. "Wage inequality in the developing world: Evidence from Latin America," Review of Development Economics, Wiley Blackwell, vol. 26(4), pages 1944-1970, November.

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