Inferring within-country inequality from import data

Abstract

We develop a two-step method to infer inequality within a country from its import patterns. First, we identify varieties of goods typically imported by richer, more unequal countries. In a second step, to uncover within-country income inequality we exploit the variation of inequality elasticities across varieties of goods. Keeping average income constant, 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. In particular, we add consistently measured inequality data for developing countries, where conventional inequality data is scarce. We document the robustness of our methodology with multiple cross-validation exercises.

The lunch will be provided in this seminar.