Stock Market Wealth and Income Inequality

Sawhney, Bansi L.; DiPietro, William R.
March 2006
Journal of Business & Economic Studies;Spring2006, Vol. 12 Issue 1, p74
Academic Journal
In order to test the hypothesis that wealth affects the distribution of income, regressions from 73 countries were run on four different measures of income inequality. Adjusting for the level of per capita income, we find that stock market wealth has a positive and statistically significant effect on income inequality. The main policy implication is that lowering capital gains, dividend taxes or estate taxes could further aggravate inequalities in income distribution.


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