Is Inequality Underestimated in Egypt? Evidence from House Prices

25 Pages Posted: 26 Oct 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: October 2018

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 of household per capita income for urban Egypt is found to increase from 39 to 52 after correcting for the missing top tail.

Keywords: inequality, Egypt, house prices, top incomes

JEL Classification: D31

Suggested Citation

van der Weide, Roy and Lakner, Christoph and Ianchovichina, Elena, Is Inequality Underestimated in Egypt? Evidence from House Prices (October 2018). Review of Income and Wealth, Vol. 64, pp. S55-S79, 2018. Available at SSRN: https://ssrn.com/abstract=3273050 or http://dx.doi.org/10.1111/roiw.12338

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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