Is Inequality Underestimated in Egypt? Evidence from House Prices

Household income surveys often fail to capture top incomes which leads to an underestimation of income inequality. A popular solution is to combine the household survey with data from income tax records, which has been found to result in significant upward corrections of inequality estimates. Unfortunately, tax records are unavailable in many countries, including most of the developing world. In the absence of data from tax records, this study explores the feasibility of using data on house prices to estimate the top tail of the income distribution. In an application to Egypt, where estimates of inequality based on household surveys alone are low by international standards, the study finds strong evidence that inequality is indeed being underestimated by a considerable margin. The Gini index for urban Egypt is found to increase from 36 to 47 after correcting for the missing top tail.

Bibliographic Details

Main Authors:	van der Weide, Roy, Lakner, Christoph, Ianchovichina, Elena
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-06
Subjects:	HOUSEHOLD INCOMES, INDICATOR FUNCTION, HOUSEHOLD SURVEY, HOUSEHOLD SIZE, INCOME SHARE, ITS, INCOME, INTEREST, POVERTY RATES, SALARY, EMERGING ECONOMIES, EXCHANGE, ECONOMIC REVIEW, LABOR FORCE, DEVELOPING COUNTRIES, DISTRIBUTION OF INCOME, POSITIVE VALUE, MORTGAGE, WORLD DEVELOPMENT INDICATORS, LINEAR MODEL, POLICY DISCUSSIONS, SALARIES, HOUSEHOLD SURVEY DATA, STANDARD PRACTICE, PRICE, TAX, INCOME TAX, CREDIT CARD, SAVING, DEVELOPED COUNTRIES, ECONOMIC ANALYSIS, SURVEY SAMPLE, POPULATION CENSUS, BETWEEN-GROUP INEQUALITY, SAVINGS, MORTGAGES, RURAL HOUSEHOLDS, LABOR FORCE SURVEYS, MEDIAN INCOME, WAGE, HOUSEHOLD HEAD, INEQUALITY MEASURES, REPRESENTATIVE SAMPLE, INCOME INEQUALITY, AVERAGE INCOME, GROUP MEANS, GINI INDEX, CROSS-COUNTRY REGRESSION, INTERNATIONAL COMPARISON, HOUSEHOLD INCOME, HIGH INCOME, HOUSEHOLD SURVEYS, CONSUMPTION EXPENDITURE, INDICATORS, INCOME LEVELS, MIDDLE-INCOME COUNTRIES, PRODUCT, INEQUALITY COMPONENT, REAL ESTATE, AVERAGE RATE, INCOME DATA, EMPIRICAL APPLICATION, EQUITY, CONSUMPTION, INEQUALITY ESTIMATES, CUMULATIVE DISTRIBUTION, POPULATION SHARE, MORTGAGE MARKETS, HIGH INCOMES, DEPENDENT VARIABLE, DISTRIBUTION FUNCTION, HOUSEHOLD DATA, INCOME DISTRIBUTIONS, LINEAR RELATIONSHIP, CONSUMPTION SURVEY, DEVELOPING WORLD, MEAN INCOME, FUNCTIONAL FORM, INCOME DISTRIBUTION, TOTAL POPULATION, INCOME COUNTRIES, INCOMES, INEQUALITY COUNTRIES, REPRESENTATIVE “SAMPLE, SHARES, DOWNWARD BIAS, EARNING, RENTAL VALUE, SURVEYS, INEQUALITY MEASURE, INCREASING FUNCTION, CUMULATIVE DISTRIBUTION FUNCTION, ECONOMIC INEQUALITY, ECONOMIC DEVELOPMENT, GROUP INEQUALITY, INCOME STATISTICS, SHARE, DEVELOPING ECONOMY, INCOME SHARES, SAMPLING, SURVEY DATA, EMPIRICAL EVIDENCE, MEASURES OF POVERTY, HOUSEHOLD EXPENDITURES, POLICY RESEARCH, EXCHANGE RATE, MEASURING INEQUALITY, ARBITRAGE, POPULATION SUB-GROUP, HOUSEHOLD EXPENDITURE, PRICES, INCOME LEVEL, INEQUALITY,
Online Access:	http://documents.worldbank.org/curated/en/2016/06/26514568/inequality-underestimated-egypt-evidence-house-prices http://hdl.handle.net/10986/24645
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