Going Beyond the Gini Ratio

Tay, Stephen
December 2014
Journal of Southeast Asian Economies;Dec2014, Vol. 31 Issue 3, p453
Academic Journal
Income inequality affects substantive outcomes such as redistribution and voter turnout. Nevertheless, a country's level of income inequality has a differential impact on citizens' evaluation of the same because individuals have different normative values about inequality. This paper shifts the analytical focus from objective income inequality--commonly measured by the Gini ratio--to subjective dimensions of income inequality, namely individual tolerance for income inequality. Using the Philippines as a case, this paper argues that a country's level of objective income inequality does not systematically affect a person's level of tolerance for income inequality. This argument is counter-intuitive because most extant studies implicitly assume that a country's level of income inequality affects a person's values on the same. By focusing on a person's redistributive preference, this paper also shows that subjective dimensions of income inequality can affect substantive outcomes.


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