Measuring inequality beyond the Gini coefficient may clarify conflicting findings

Blesch, Kristin; Hauser, Oliver P.; Jachimowicz, Jon M.

doi:10.1038/s41562-022-01430-7

Cited by 32 publications

(24 citation statements)

References 54 publications

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“…( 2 )) fail to capture, and even mask, tectonic shifts in household income, and as a result, household size. This finding adds to Blesch et al ( 2022 ) recent observation that the Gini Index is lacklustre as a single-parameter measure that fails to distinguish inequality concentrated at lower and top income percentiles, a point echoed in this article’s breakdown of changes in incomes by household size in Fig. 1 .…”

Section: Discussionsupporting

confidence: 69%

Reassessing the econometric measurement of inequality and poverty: toward a cost-of-living approach

2023

Humanit Soc Sci Commun

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The econometric measurement of inequality and poverty in advanced capitalist economies has been preoccupied with aggregate measures of relative deprivation, namely, the Gini Index and a relative poverty rate, both of which are based on economic distances from the population median. Using the case of Hong Kong, this article demonstrates the limitations of relative measures: the Gini Index masks social mobility and the relative poverty line understates actual poverty. This article argues instead for a cost-of-living approach to measure poverty, where the poverty line is defined as the cost of essential goods and services. A cost-of-living approach produces a poverty line of HK$28,815 and attendant poverty rate of 44.47% in 2020, nearly double the poverty line of HK$13,450 and poverty rate of 23.6% according to the conventional relative measure of the poverty line set to 50% of median household income—capturing a shortfall of 551,400 poor households that have been overlooked by relative measures.

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Section: Discussionsupporting

confidence: 69%

Reassessing the econometric measurement of inequality and poverty: toward a cost-of-living approach

2023

Humanit Soc Sci Commun

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“…This mechanism could account for some findings that people who live in more objectively unequal social contexts report reduced wellbeing (e.g., Layte, 2012; Oishi et al, 2011; Vilhjalmsdottir et al, 2016; Zhang & Churchill, 2020). At the same time, however, a recent meta‐analysis found that the impact of inequality on wellbeing did not differ from zero (Ngamaba et al, 2018; see e.g., Delhey & Dragolov, 2014; Zhao, 2012), leading researchers to suggest that there may be important moderators of this relationship, including GDP (Ngamaba et al, 2018), individual income (Quispe‐Torreblanca et al, 2021; see also Cheung & Lucas, 2016), perceived social mobility (e.g., Sagioglou et al, 2019) and the concentration of inequality in the top or bottom of the distribution (Blesch et al, 2022; Tan et al, 2020).…”

Section: Consequences Of Economic Inequalitymentioning

confidence: 99%

“…At the same time as developing a better understanding of the basis for people's perceptions of economic inequality, there have been calls for researchers to more precisely conceptualize the perception of economic inequality that is most relevant for their research question (with the implication that different questions may require different conceptualizations) and to develop better tools for measuring these perceptions. For instance, Jachimowicz et al (2022) argue that to make progress in understanding the nature and impact of economic inequality, researchers need to (among other things) consider which economic outcomes are most relevant for their research question (e.g., inequality in income or wealth), the level at which these outcomes should be measured (e.g., within a neighbourhood or country) and the part of the economic distribution that is of most interest (e.g., inequality at the bottom or top of the distribution; see for instance, Blesch et al, 2022). While this applies to researchers who are using objective measures as well as those who are measuring subjective perceptions of inequality, in the latter case there is the need to additionally consider whether it is reasonable to expect people's perceptions to show the degree of specificity implied by the decisions above.…”

Section: Perceptions Of the Scale Of Economic Inequalitymentioning

confidence: 99%

How living in economically unequal societies shapes our minds and our social lives

Peters

Jetten

2023

British J of Psychology

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In recent decades, the economies of many countries have produced increasingly unequal outcomes for the rich and poor. This economic trend has attracted interest from members of the media, public and political classes as well as researchers who are interested in its societal implications. While this research has traditionally been the purview of economists and sociologists, there has been a burgeoning growth in research that has sought to understand the psychology of economic inequality. In this review, we summarize this work, focusing on two major themes: (1) how people perceive the scale of economic inequality and appraise its significance, and (2) how living in an economically unequal environment shapes people's social lives. Together, this work affirms claims that economic inequality is 'the defining issue of our time' (Obama, 2013) with a great deal of destructive potential. We identify important questions that await further research attention.

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“…The Gini coefficient is by far the most widely used indicator of economic inequality, and is frequently used to inform policy discussions and support political choices. However, Gini coefficient has also some drawbacks: inability to adequately distinguish between different income distributions, and mixed results on how income inequality is related to various outcomes (Blesch, Hauser and Jachimowicz, 2022). While most of the works on inequality tend to focus on the level of inequality, little is know on how shape and skewness impacts inequality perception.…”

Section: Inequality Perception: Skewness Aversionmentioning

confidence: 99%

Is skewed unfair? The role of experienced inequalities and self-interest in redistributive behavior

Bernardic¹,

Lascombes²

2023

Preprint

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Although income inequality has been growing in most of the OECD countries since the 1970s, demands for more redistributive policies have stagnated. While many scholars looked at the macroeconomic factors, only a few focused on the cognitive mechanisms behind preferences for redistribution. Building from behavioral and political economists' literature, our two preregistered studies aimed to test how experienced inequalities and self-interest influence individuals’ ideal income distribution. Study one (N=366) used a spectator/worker between-subject experimental design to show that individuals adjust their ideal level of inequality to the one they have experienced. Study two (N=117) tested how self-interest moderates the motive for justice, most notably for individuals benefiting from income inequalities. Studying the inequality gap by combining recent theories and methods from behavioral economics and political sciences not only advance our understanding of how experienced inequalities and self-interest influences redistributive behavior but also offer an empirical basis for future studies investigating redistributive behavior.

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Measuring inequality beyond the Gini coefficient may clarify conflicting findings

Cited by 32 publications

References 54 publications

Reassessing the econometric measurement of inequality and poverty: toward a cost-of-living approach

Reassessing the econometric measurement of inequality and poverty: toward a cost-of-living approach

How living in economically unequal societies shapes our minds and our social lives

Is skewed unfair? The role of experienced inequalities and self-interest in redistributive behavior

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