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Distribución: Intuiciones Básicas. Economía de la Pobreza y la Desigualdad Xavi Ramos. Índice. ¿Igualdad de qué?. ¿Igualdad de qué? Renta, bienestar y utilidad Comparación de bienestar Funciones de bienestar social Rankings Necesidades y dominancia. Introducción. - PowerPoint PPT Presentation
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Xavi R
amos:
Xavi R
amos: E
conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Distribución: Intuiciones Básicas
Economía de la Pobreza y la Desigualdad Economía de la Pobreza y la Desigualdad
Xavi RamosXavi Ramos
Xavi R
amos:
Xavi R
amos: E
conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Índice
¿Igualdad de qué?¿Igualdad de qué? Renta, bienestar y utilidadRenta, bienestar y utilidad Comparación de bienestarComparación de bienestar Funciones de bienestar socialFunciones de bienestar social RankingsRankings Necesidades y dominanciaNecesidades y dominancia
¿Igualdad de qué?¿Igualdad de qué?
Xavi R
amos:
Xavi R
amos: E
conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Introducción
Empecemos analizando una Empecemos analizando una distribución de forma intuitiva con distribución de forma intuitiva con instrumentos básicos y datos reales.instrumentos básicos y datos reales.
Usaremos la distribución de la rentaUsaremos la distribución de la renta … … ¿qué renta?¿qué renta?
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
What do we know? – data
Try a simple thought experiment Try a simple thought experiment Use the Current Population Survey dataUse the Current Population Survey data
See See DeNavas-Walt et al (2005) Data, descriptions and computationsData, descriptions and computations
Just take standard definitionsJust take standard definitions Do everything in 2004 dollarsDo everything in 2004 dollars Focus on income of householdsFocus on income of households
What do the data tell us?What do the data tell us? Key tablesKey tables Begin with Table A-1Begin with Table A-1
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Definición de la renta utilizada? 1. Earnings1. Earnings 2. Unemployment compensation2. Unemployment compensation 3. Workers’ compensation3. Workers’ compensation 4. Social security4. Social security 5. Supplemental security income5. Supplemental security income 6. Public assistance6. Public assistance 7. Veterans’ payments7. Veterans’ payments 8. Survivor benefits8. Survivor benefits 9. Disability benefits9. Disability benefits 10. Pension or retirement income10. Pension or retirement income
11. Interest11. Interest 12. Dividends12. Dividends 13. Rents, royalties, estates & trusts13. Rents, royalties, estates & trusts 14. Educational assistance14. Educational assistance 15. Alimony15. Alimony 16. Child support16. Child support 17. Financial assistance from outside 17. Financial assistance from outside
the householdthe household 18. Other income18. Other income
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Lagunas en nuestra definición Cubre la renta monetaria recivida Cubre la renta monetaria recivida
Con excepción de algunas fuentes como los incrementos de capitalCon excepción de algunas fuentes como los incrementos de capital
Antes de deduccionesAntes de deducciones Impuestos individuales directos Impuestos individuales directos Contribuciones a la SS y sindicatosContribuciones a la SS y sindicatos Contribuciones para MedicareContribuciones para Medicare
No incluye remuneraciones en especieNo incluye remuneraciones en especie Vales alimanícios (food stamps)Vales alimanícios (food stamps) Atención sanitariaAtención sanitaria Subsidios a la viviendaSubsidios a la vivienda Auto-consumoAuto-consumo Remuneración en especie de la actividad económica,Remuneración en especie de la actividad económica, Contribuciones empresariales a planes de pensiones.Contribuciones empresariales a planes de pensiones.
Veamos una primera ilustración de la distribución …Veamos una primera ilustración de la distribución …
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
A snapshot viewunder
$5,000$5,000 -$9,999
$10,000 -$14,999
$15,000-$24,999
$25,000-$34,999
$35,000-$49,999
$50,000 -$74,999
$75,000-$99,999
$100,000 and over
1967 5.1 8.5 7.6 14.7 16 21.9 17.3 5.2 3.7
1974 2.7 7.7 7.8 14.4 14.3 19 20.7 7.9 5.5
1984 3 7.2 7.9 14.1 13.5 17 19.4 9.6 8.4
1994 3.1 6.6 7.4 13.8 12.7 15.8 18.2 10.7 11.7
2004 3.5 5.2 6.7 12.9 11.9 14.8 18.3 11 15.7
Gives proportions of households in each income category, Gives proportions of households in each income category, year by yearyear by year
Straight from the official tableStraight from the official table Cut down to manageable number of yearsCut down to manageable number of years omitted population totalsomitted population totals
But, check in a diagramBut, check in a diagram standard frequency polygon….standard frequency polygon….
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Representing the distribution?
0
5
10
15
20
25
$2,500
$7,500
$12,500
$20,000
$30,000
$42,500
$62,500
$87,500
$550,000
1967
1974
1984
1994
2004
Xavi R
amos:
Xavi R
amos: E
conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Questions Mixed messages from this illustrationMixed messages from this illustration
Shifts over time make sense…Shifts over time make sense… ……income growthincome growth But weird stuff on the right…But weird stuff on the right… ……arises from arbitrary groupingarises from arbitrary grouping
Get more insight from a better representation Get more insight from a better representation Use the concept of quantileUse the concept of quantile
includes well-known conceptsincludes well-known concepts median, quartiles etcmedian, quartiles etc a “boundary” incomea “boundary” income
Examine Examine DeNavas-Walt et al (2005) Table A-3Table A-3 Do this for 1974, 2004Do this for 1974, 2004 Check out the growthCheck out the growth
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Quantile Incomes by Households
1974
10% $9,741
20% $16,285
50% $37,519
80% $64,781
90% $83,532
95% $102,534
2004
$10,927
$18,500
$44,389
$88,029
$120,924
$157,185
Growth
12.2%
13.6%
18.3%
35.9%
44.8%
53.3%
More detail.More detail.
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Quantiles: 1967 – 2004
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
1965 1970 1975 1980 1985 1990 1995 2000 2005
q.10
q.20
q.50
q.80
q.90
q.95
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
The Parade: quantiles vs population
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
0 0.2 0.4 0.6 0.8 1proportion of population
in
com
e
1974
2004
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
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Inequality from quantiles? But does this way of representing distributions tell us But does this way of representing distributions tell us
about inequality?about inequality? Clear that growth is lopsidedClear that growth is lopsided
……top decile grew by almost four times as much four times as top decile grew by almost four times as much four times as much as bottommuch as bottom
Suggests increase in inequality?Suggests increase in inequality? (whatever that may be)(whatever that may be)
We can also use quantiles to derive simple inequality We can also use quantiles to derive simple inequality measuresmeasures eg “90/10” ratioeg “90/10” ratio (increased from 8.6 to 11.1)(increased from 8.6 to 11.1) or ratios to medians…or ratios to medians…
Have a look at path of these ratios…Have a look at path of these ratios… … … and then think againand then think again
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Quantile ratios: US 1967 – 2004
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1965 1970 1975 1980 1985 1990 1995 2000 2005
q.95/q.50
q.90/q.50
q.80/q.50
q.20/q.50
q.10/q.50
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
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Overview...
Income distribution
Inequality
Poverty
Methods
Inequality and Poverty: Agenda
More of what we know about the US… and elsewhere
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
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Fuller income information
Focus on additional income from same sourceFocus on additional income from same source DeNavas-Walt et al (2005) Table A-3Table A-3
Again, we don’t question the definitionsAgain, we don’t question the definitions household income before deductionhousehold income before deduction income receiver: household income receiver: household
Divide distribution up into five equal slicesDivide distribution up into five equal slices Compute mean income of each 20% sliceCompute mean income of each 20% slice
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
1974
1st 20% $9,324
2nd 20% $23,176
3rd 20% $37,353
4th 20% $53,944
5th 20% $95,576
Overall $43,875
2004
$10,264
$26,241
$44,455
$70,085
$151,593
$60,528
Growth
10.1%
13.2%
19.0%
29.9%
58.6%
38.0%
Mean incomes by groups of households
More detail.More detail.
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
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Differential growth of mean incomesMean Incomes US
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
1965 1970 1975 1980 1985 1990 1995 2000 2005
Lowest 20%Second 20%Third 20%Fourth 20%Highest 20%
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Three alternative views
First, plot these mean incomes cumulativelyFirst, plot these mean incomes cumulatively Plot against population sharesPlot against population shares Do this for any given yearDo this for any given year Get a powerful toolGet a powerful tool
Second, plot income shares against timeSecond, plot income shares against time Divide each group mean by overall meanDivide each group mean by overall mean Graph these for whole periodGraph these for whole period Lopsided growth?Lopsided growth?
Third plot income shares against population sharesThird plot income shares against population shares Do this for any given yearDo this for any given year Get a very powerful toolGet a very powerful tool
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
1: The Generalised Lorenz Curve
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
0 0.2 0.4 0.6 0.8 1proportion of population
in
com
e
1974
2004
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
0
10
20
30
40
50
60
1965 1970 1975 1980 1985 1990 1995 2000 2005
s1
s2
s3
s4
s5
2: Income shares: US 1967-2004
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
2: Top income shares in US
0
5
10
15
20
25
30
35
40
45
50
19
13
19
17
19
21
19
25
19
29
19
33
19
37
19
41
19
45
19
49
19
53
19
57
19
61
19
65
19
69
19
73
19
77
19
81
19
85
19
89
19
93
19
97
P90–100
P99–100CG excl
P99–100CG Incl
Piketty, T. and E. Saez (2003) “Income inequality in the United States, 1913-1998,” Quarterly Journal of Economics, 118, 1-39.
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
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3: Lorenz curve
0
0.2
0.4
0.6
0.8
1
0 0.2 0.4 0.6 0.8 1proportion of population
prop
ortio
n of
inco
me
1974
2004
Equality
Natural Natural interpretation in interpretation in terms of sharesterms of shares
Gives a natural Gives a natural definition of the Gini definition of the Gini coefficientcoefficient
Use this to have a Use this to have a quick look at quick look at inequality in inequality in different countries…different countries…
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
esigualdad
Lorenz around the world…
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
Proportion of population
Pro
po
rtio
n o
f In
com
e
Sweden 2000 inc 25
India 1999–00 exp 32.5
United States 2000 inc 40.8
China 2001 exp 44.7
Russia 2000 exp 45.6
Brazil 1998 inc 59.1
Get full versionGet full version
SourceSource World Bank (2004)World Bank (2004)
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
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Income or consumption?Gini coefficient
Year Consumption IncomeAlbania 1996 0.252 0.392
Bulgaria 1995 0.274 0.392Bangladesh 2000 0.334 0.392
Vietnam 1998 0.362 0.489Nepal 1996 0.366 0.513
Morocco 1998 0.390 0.586Nicaragua 1998 0.417 0.534
Thailand 2000 0.428 0.523Peru 1994 0.446 0.523
Panama 1997 0.468 0.621Russia 1997 0.474 0.478Brazil 1996 0.497 0.596
SeeSee World Bank (2005)World Bank (2005)
Xavi R
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Xavi R
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conomía de la P
obreza y la Desigualdad
Econom
ía de la Pobreza y la D
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España, 1985-1996
Micro data: ECPF 1985-1996Micro data: ECPF 1985-1996
Data shortcomings: underreporting of income dataData shortcomings: underreporting of income data
Income definition: real net equivalised annual incomeIncome definition: real net equivalised annual income
NetNet: of S.S. contributions and direct taxes (IRPF): of S.S. contributions and direct taxes (IRPF)
RealReal: Use RPI for each income decile: Use RPI for each income decile
Equivalence scaleEquivalence scale: OECD’s: OECD’s
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