Top Incomes and the Measurement of Inequality in Egypt

By all accounts, income inequality in Egypt is low and had been declining during the decade that preceded the 2011 revolution. As the Egyptian revolution was partly motivated by claims of social injustice and inequalities, this seems at odds with a...

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Bibliographic Details
Main Authors:	Hlasny, Vladimir, Verme, Paolo
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	AGGREGATE INCOME AVERAGE INCOME BENCHMARK CASH TRANSFERS COUNTERFACTUAL DATA QUALITY DATA SET DEVELOPING COUNTRIES DEVELOPMENT POLICY DISTRIBUTION FUNCTION DISTRIBUTION OF INCOME DIVIDENDS EARNING ECONOMETRICS ECONOMIC INEQUALITY ECONOMIC REVIEW ECONOMIC STUDIES EMPIRICAL PURPOSES EMPIRICAL SECTION EXPECTED VALUE EXPLANATORY POWER EXPLANATORY VARIABLES FUNCTIONAL FORM GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GROWTH RATES HIGH INCOMES HOUSEHOLD BUDGET HOUSEHOLD CONSUMPTION HOUSEHOLD DATA HOUSEHOLD INCOME HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD SURVEY DATA HOUSEHOLD SURVEYS HUMAN DEVELOPMENT INCOME INCOME BIAS INCOME DATA INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INCOME LEVELS INCOME SHARES INCOMES INEQUALITY INEQUALITY ESTIMATES INEQUALITY MEASURE INEQUALITY MEASUREMENT LINEAR MODEL LORENZ CURVE LORENZ CURVES LOW INCOME MEAN INCOME MEAN INCOMES MEASURES OF POVERTY MEASURING INEQUALITY MEASURING POVERTY NEGATIVE RELATIONSHIP POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY RESEARCH POOR POVERTY MEASUREMENT POVERTY MEASURES POVERTY REDUCTION PRIMARY SAMPLING UNITS PSU RANDOM SAMPLING RELATIVE IMPORTANCE RURAL RURAL AREAS RURAL RESIDENTS SALARIES SAVINGS SENSITIVITY ANALYSIS WAGES WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2013/08/18089005/top-incomes-measurement-inequality-egypt http://hdl.handle.net/10986/15924

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Summary:	By all accounts, income inequality in Egypt is low and had been declining during the decade that preceded the 2011 revolution. As the Egyptian revolution was partly motivated by claims of social injustice and inequalities, this seems at odds with a low level of income inequality. Moreover, while income inequality shows a decline between 2000 and 2009, the World Values Surveys indicate that the aversion to inequality has significantly increased during the same period and for all social groups. This paper utilizes a range of recently developed statistical techniques to assess the true value of income inequality in the presence of a range of possible measurement issues related to top incomes, including item and unit non-response, outliers and extreme observations, and atypical top income distributions. The analysis finds that correcting for unit non-response significantly increases the estimate of inequality by just over 1 percentage point, that the Egyptian distribution of top incomes follows rather closely the Pareto distribution, and that the inverted Pareto coefficient is located around median values when compared with 418 household surveys worldwide. Hence, income inequality in Egypt is confirmed to be low while the distribution of top incomes is not atypical compared with what Pareto had predicted and compared with other countries in the world. This would suggest that the increased frustration with income inequality voiced by Egyptians and measured by the World Values Surveys is driven by factors other than income inequality.

Top Incomes and the Measurement of Inequality in Egypt

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