Fundamental accrued capital gains and the measurement of top incomes: An application to Chile

Ramon Lopez, Eugenio Figueroa (efiguero@econ.uchile.cl) and Pablo Gutiérrez C.
Authors registered in the RePEc Author Service: Pablo A. Gutiérrez C.

Working Papers from University of Chile, Department of Economics

Abstract: Most previous studies of income inequality have either ignored capital gains or have used taxable realized capital gains to estimate top incomes. Neither of these approaches is fully satisfactory. We apply for the first time a new methodology that allows us to account for fundamental accrued capital gains as part of the top incomes in a theoretically consistent manner. We estimate the shares of the superrich in Chile showing that accrued capital gains have a dramatic impact on these estimates. Also, the top income shares estimated using fundamental capital gains appear to exhibit a more stable and presumably more plausible time profile than estimates based on capital gains derived from asset market variations.

Pages: 29 pages
Date: 2015-08
New Economics Papers: this item is included in nep-ger
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Fundamental accrued capital gains and the measurement of top incomes: an application to Chile (2016)
Journal Article: Fundamental accrued capital gains and the measurement of top incomes: an application to Chile (2016)
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