How Different Studies Measure Income Inequality: Piketty and Saez Are Not the Only Game in Town

Though measuring inequality seems straightforward and uncontroversial, methodological issues greatly affect findings. This brief presents the intricacies of several income inequality studies and explains their different results. Researchers’ estimates of income inequality differ significantly because they use different units of analysis, definitions of income, adjustments for family size, capital income measures (if any), and adjustments for inflation.