Is Inequality Underestimated in Egypt? Evidence from House Prices

Roy van der Weide (), Christoph Lakner and Elena Ianchovichina

Review of Income and Wealth, 2018, vol. 64, issue s1, S55-S79

Abstract: Household income surveys often fail to capture top incomes, which leads to an underestimation of income inequality. A popular solution is to combine the household survey with data from income tax records, which has been found to result in significant upward corrections of inequality estimates. Unfortunately, tax records are unavailable in many countries, including most of the developing world. In the absence of data from tax records, this study explores the feasibility of using data on house prices to estimate the top tail of the income distribution. In an application to Egypt, where estimates of inequality based on household surveys alone are low by international standards, the study finds strong evidence that inequality is indeed being underestimated by a considerable margin. The Gini index of household per capita income for urban Egypt is found to increase from 39 to 52 after correcting for the missing top tail.

Date: 2018
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https://doi.org/10.1111/roiw.12338

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Working Paper: Is inequality underestimated in Egypt ? evidence from house prices (2016)
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