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The individual contribution to income inequality: conceptual analysis and empirical investigation

Martino, Gaetano and Polinori, Paolo (2010): The individual contribution to income inequality: conceptual analysis and empirical investigation.

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Abstract

The paper aims to study individual contributions to income inequality. The role of individual positions in the analysis of inequality is considered at various levels. The utility of inequality analysis in analysing the variation across a given income distribution is also recognised. The paper elaborates on this perspective and proposes a definition of individual contributions to inequality within a given income distribution. The concept of such an individual contribution is proposed, and its properties are discussed. The paper presents and tests the hypothesis that given the concept of individual contributions, patterns of influence associated with the determinants of inequality can be identified across a given income distribution. An empirical method of investigation and testing is proposed based on the Survey on Household Income and Wealth carried out by the Bank of Italy. The results support the hypothesis and show that the patterns identified are useful in the analysis of inequality.

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