Alex Cobham and Andy Sumner bring us up to date on the techie-but-important debate over how to measure inequality
It’s about six months since we triggered a good wonk-tastic discussion here on Duncan’s blog on how to measure inequality. We proposed a new indicator and called it ‘the Palma’ after Chilean economist Gabriel Palma, on whose work it was based. We suggested the Palma would complement, or perhaps even replace the (in our view) less useful Gini index. Here we bring things up to date with a look at inequality in the post-2015 debate, and present some further findings on the relative merits of Gini and Palma, based on our new paper.
First, post-2015 and all that.
Last week the Center for Global Development held an event in Washington DC to discuss the best income inequality measures for post-2015, with both a technical panel (video) comparing alternative measures, including the median, the Palma, the Commitment to Equity indicator and a multidimensional approach.
There was also a ‘user’ panel (video) with wonks from the IADB, IMF, Oxfam, UNICEF and the World Bank, discussing the policy need and the scope for implementation. While panelists and other participants did not agree on the idea of a post-2015 inequality goal or target (surprise, surprise), there was near unanimity on the importance of measuring income inequality, and doing so better than we do now.