Measuring Richness and Poverty: A Micro Data Application to Europe and Germany

Andreas Peichl, Thilo Schaefer () and Christoph Scheicher ()
Additional contact information
Thilo Schaefer: University of Cologne
Christoph Scheicher: University of Cologne

No 3790, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper, we define a new class of richness measures. In contrast to the often used headcount, these new measures are sensitive to changes in rich persons' income and therefore allow for a more sophisticated analysis of richness. We demonstrate the application of these new measures to analyze the development of poverty and richness over time in Germany, to compare Germany to many other European countries and to investigate the impact of tax reforms on poverty and richness. Using these examples, we show the importance of taking into account the intensity of changes and not only the number of people beyond a given richness line (headcount). We propose to use the new measures in addition to the headcount index for a more comprehensive analysis of richness.

Keywords: flat tax; tax reform; poverty; affluence; richness (search for similar items in EconPapers)
JEL-codes: D31 H23 I32 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2008-10
New Economics Papers: this item is included in nep-eec and nep-ltv
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Citations: View citations in EconPapers (15)

Published - revised version published in: Review of Income and Wealth, 2010, 56 (3), 597-619

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Related works:
Journal Article: MEASURING RICHNESS AND POVERTY: A MICRO DATA APPLICATION TO EUROPE AND GERMANY (2010)
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