Anecdotal evidence has it that high economic inequality led to Arab uprisings. Empirical evidence from household surveys reveals that inequality has been moderate. Much has been written about this Middle East and North Africa (MENA) inequality puzzle. We contribute by investigating the dispersion of top expenditures and evidence of top-expenditure measurement errors in eleven household surveys from Egypt, Jordan, Palestine, Sudan, and Tunisia. Inequality indexes are corrected by replacing potentially mismeasured expenditures with values drawn randomly from Pareto distributions. Across all surveys, expenditure inequality is at or below that found in other emerging countries worldwide. Robustness tests also corroborate that inequality in Egypt, Palestine, and Tunisia fell over time, which cannot be attributed to outliers in sampling. The Gini is consistently below 0.32 in Egypt, 0.37 in Jordan, and 0.43 in Palestine, Sudan, and Tunisia. Several surveys include outliers influencing inequality upwards. The Egyptian, Palestinian, and Tunisian surveys exhibit smoother top tails of expenditures, approximable by parametric distributions.

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Top Expenditure Distribution in North Africa and Middle East Countries and the Inequality Puzzle

  • Vladimir Hlasny

摘要

Anecdotal evidence has it that high economic inequality led to Arab uprisings. Empirical evidence from household surveys reveals that inequality has been moderate. Much has been written about this Middle East and North Africa (MENA) inequality puzzle. We contribute by investigating the dispersion of top expenditures and evidence of top-expenditure measurement errors in eleven household surveys from Egypt, Jordan, Palestine, Sudan, and Tunisia. Inequality indexes are corrected by replacing potentially mismeasured expenditures with values drawn randomly from Pareto distributions. Across all surveys, expenditure inequality is at or below that found in other emerging countries worldwide. Robustness tests also corroborate that inequality in Egypt, Palestine, and Tunisia fell over time, which cannot be attributed to outliers in sampling. The Gini is consistently below 0.32 in Egypt, 0.37 in Jordan, and 0.43 in Palestine, Sudan, and Tunisia. Several surveys include outliers influencing inequality upwards. The Egyptian, Palestinian, and Tunisian surveys exhibit smoother top tails of expenditures, approximable by parametric distributions.