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Alternative Distributions for Inequality and Poverty Comparisons

Publication Details

  • Alternative Distributions for Inequality and Poverty Comparisons
  • Published: 16 Jul 2013
  • Status: Current
  • Author: Creedy, John
  • Pages: (2),iii,22
  • ISBN: 978-0-478-40347-3 (Online)
  • Ref. No: WP 13/11
  • Pub. type: Working Papers
  • Responsible units: Tax Strategy
  • Copyright: © Crown Copyright
  • JEL Classification: D13; D31; D63
 

Alternative Distributions for Inequality and Poverty Comparisons

Published 16 Jul 2013

Author: John Creedy

Abstract

This paper provides an introductory review of the alternative possible income distributions which can be used when making cross-sectional evaluations of the effects of taxes and transfers using a household economic survey. This paper attempts to clarify the various alternatives, both for users of data and those wishing to interpret results. Special attention is given to the choice of income unit. The need to avoid spurious comparisons is stressed. The use of adult equivalence scales and the application of an explicit sharing rule are considered. Comparisons over time, where both the tax structure and the populations differ, are also considered. Numerical examples are used to highlight the alternative approaches and distributions.

This Working Paper is available in Adobe PDF and HTML. Using PDF Files

Contents

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Executive Summary

1 Introduction

2 A Hypothetical Population

3 Inequality and Tax Progressivity

4 Comparisons over Time

5 Conclusions

References

twp13-11.pdf (215 KB) pp. 1–12

Acknowledgements

I have benefited from discussions with Omar Aziz and comments by Christopher Ball, Diana Cook, Margaret Galt, Nicolas Herault, Guyonne Kalb, David Law, Denis O’Brien, Grant Scobie and Justin van de Ven on an early version of this paper.

Disclaimer

The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government.  The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in these working papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

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