Recovering Within-Country Inequality From Trade Data

Dorothee Hillrichs and Gonzague Vannoorenberghe
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Dorothee Hillrichs: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 2021014, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: This paper develops a novel method to estimate inequality within a country based on what it imports. If preferences are non-homothetic, rich and poor individuals in a country have different consumption profiles. Observing imports can thus inform us about the income distribution in a country. The global availability of trade data allows us to estimate inequality using the same transparent and comparable method for a large sample of countries over time. Compared to conventional data, we feature an especially good coverage of developing countries. We provide a number of robustness checks and cross-validation exercises to gauge the performance of our method.

Keywords: International trade; Inequality; Non-homothetic preferences (search for similar items in EconPapers)
JEL-codes: D63 F14 (search for similar items in EconPapers)
Pages: 58
Date: 2021-06-23
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2021014

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