On the comparison of inequality measures: evidence from the world values survey

ABSTRACT

This paper overviews the well-known inequality measures and applies information-theoretic tools to compare inequality between income levels among nations. Specifically, we use the World Values Survey data on households’ income levels in 57 countries to rank inequality. We then examine the effects of macroeconomic outcomes on inequality. Our findings suggest that the Gini coefficient with $J$-divergence provides further insight into inequality rankings. In addition, the results indicate that higher inflation and GDP growth lead to lower inequality. Finally, we find a positive relationship between income inequality and money growth.

KEYWORDS:

• Gini index
• income inequality
• Information-Theoretic measures

JEL CLASSIFICATION:

• D31
• D63

Disclosure statement

No potential conflict of interest was reported by the author(s).