Wealth inequality: Theory, measurement and decomposition

James Davies, Nicole M. Fortin and Thomas Lemieux

Canadian Journal of Economics, 2017, vol. 50, issue 5, 1224-1261

Abstract: This paper reviews the basic principles of inequality measurement, underlining the advantages and shortcomings of alternative measures from a theoretical standpoint and in the context of the study of the distribution of wealth. Adopting the two most popular measures, the Gini index and the P-shares, the paper documents wealth inequality in Canada using the 1999, 2005 and 2012 Survey of Financial Security (SFS). It carries out several decompositions with covariates, featuring DFL-type reweighting methods and Gini and P-shares RIF regressions. The latter parallel decompositions deepen our understanding of how changes in socio-demographic characteristics, including the compensating role of family formation and human capital, impact wealth inequality.

JEL-codes: D31 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (29)

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