Is Inequality Underestimated in Egypt? Evidence from House Prices

31 Pages Posted: 19 Jul 2016 Last revised: 27 Apr 2018

See all articles by Roy van der Weide

Roy van der Weide

World Bank; World Bank - Development Research Group (DECRG)

Christoph Lakner

World Bank - Development Research Group (DECRG); University of Oxford - Department of Economics

Elena Ianchovichina

World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: June 22, 2016

Abstract

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.

Keywords: Poverty Reduction Strategies, Urban Housing and Land Settlements, Urban Housing, Urban Governance and Management, Municipal Management and Reform, Labor & Employment Law, Inequality, Armed Conflict

Suggested Citation

van der Weide, Roy and Lakner, Christoph and Ianchovichina, Elena, Is Inequality Underestimated in Egypt? Evidence from House Prices (June 22, 2016). World Bank Policy Research Working Paper No. 7727. Available at SSRN: https://ssrn.com/abstract=2811375

Roy Van der Weide (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Christoph Lakner

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org/en/about/people/christoph-lakner

University of Oxford - Department of Economics

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

Elena Ianchovichina

World Bank ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-8910 (Phone)
202-522-1159 (Fax)

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