Income Inequality and Redistribution In Sub-Saharan Africa By Miguel Niño-Zarazúa

20.500.12592/bdkc3z

Income Inequality and Redistribution In Sub-Saharan Africa By Miguel Niño-Zarazúa

14 Nov 2022

In addition, we adopted the conceptual base of the Canberra Group to minimize the problems that may arise from informational differences in the WIID in terms of unit of analysis, equivalence scale, the quality of the data and the welfare concept.8 In order to keep the global coverage as high as possible, we included consumption- based quintile data, in addition to income-based data, which is our p. [...] The size of the national income pie in the hands of the richest can change not only the shape of the income distribution and the level of income inequality, but also governments’ incentives and preferences for redistribution. [...] In order to overcome the limitations in the existing literature, we follow Jordá and Niño-Zarazúa (2019) by applying a parametric model, based on the so-called generalized beta distribution of the second kind (GB2) to help us estimate the size of the bias – or truncation points in the Lorenz curves – arising from the omission of top incomes in the estimation of income inequality measures. [...] As the income share going to the richest individuals can have a strong influence on the shape of the Lorenz curve and the Gini index, as well as on governments’ redistributive decisions, we are interested in assessing the extent to which the impact of income inequality on government revenues changes by alternative assumptions on the shape of the income distribution. [...] In the case of SSA, the size of the elasticities goes down from 2.52 to 2.37, and from 1.72 and -1.96 to 1.59 and -0.68, for the cases of middle-income and low-income countries, respectively.17 Thus, despite the very large effect of top incomes on income inequality in the SSA region, accounting for the richest does not lead to a sizable increase in government revenues.
Pages
50
Published in
Kenya

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