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Mar
23
IRES Lunch Seminar - Dorothée Hillrichs, IRES/LIDAM
By IRES Lunch Seminar

Dorothée Hillrichs

IRES/LIDAM

will give a presentation on

Recovering Within-Country Inequality from Trade Data

Abstract:

We develop a novel method to infer within-country income inequality. Our two-step method exploits the link between a country's income distribution and its import patterns. First, we identify varieties of goods typically imported by richer, more unequal countries. In a second step, we exploit the variation of income elasticities across varieties of goods to uncover within-country net income inequality. For a given average income, disproportionate imports of highly income elastic varieties correlate with income dispersion. We take advantage of the global availability of trade flow reports to extend inequality data coverage across countries and over time. Notably, we add consistently measured inequality data for developing countries, where conventional inequality data is scarce. Our final data set covers inequality in 162 countries between 1995-2018. We document the viability of our methodology with multiple cross-validation exercises.