The Inequality We Want: How Much Is Too Much?

Alice Krozer

Journal of International Commerce, Economics and Policy (JICEP), 2015, vol. 06, issue 03, 1-27

Abstract: A key aspect defining the contemporary income distribution is the (increasing) share the top holds compared to the rest. This paper shows that income concentration increases towards the very top of the distribution, while the shares the middle- and upper–middle-income groups hold remain stable across countries and over time. Traditional indicators less sensitive to changes at the extremes of the distribution might obscure inequality's actual dimension, and thereby help perpetuate it. To avoid this, the present paper discusses a complementary indicator for the measurement of inequality: The ratio of the income share of the top 5% over that of the bottom 40%. The indicator is denominated Palma v.2, in reference to the recently suggested "Palma ratio" dividing the income share of the top 10% income earners by those at the bottom 40%.

Keywords: Inequality; income distribution; poverty; palma; gini coefficient; D31; D63; I3 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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Working Paper: The Inequality We Want: How Much Is Too Much? (2017)
Working Paper: The Inequality We Want: How Much is too Much? (2015)
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DOI: 10.1142/S1793993315500167

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