Cross-National Variation in Income Inequality and its Determinants: An Application of Bayesian Model Averaging on a New Standardized Inequality Data Set

Jiří Hasman and Josef Novotný

Prague Economic Papers, 2015, vol. 2015, issue 2, 211-224

Abstract: A new good quality standardized data set for cross-national comparisons of income inequality covering 147 countries has been constructed. The Bayesian model averaging and multiple imputation approach have been used to identify robust correlates from a larger pool of potential predictors of cross-national variation in inequality determined from previous literature. The results document signiicant macro-regional speciicity both regarding levels and predictors of inequality. While globalization associates with lower inequality in Western countries, it has opposite e ects in Latin America, Sub-Saharan Africa or post-communist countries. Age structure, the extent of social spending, or colonial history are another important factors with regionally speciic impacts on inequality. By contrast, explanative power of some other traditional determinants of inequality has not been corroborated.

Keywords: income inequality; Bayesian model averaging; cross-country analysis; multiple (search for similar items in EconPapers)
JEL-codes: C11 D31 O15 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.18267/j.pep.509

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