Declining inequality in Latin America? Robustness checks for Peru

Diego Winkelried, Bruno Escobar

Research output: Contribution to journalArticle in a journalpeer-review

1 Scopus citations


Household surveys underreport incomes from the upper tail of the distribution, affecting our assessment about inequality. This paper offers a tractable simulation method to deal with this situation in the absence of extra information (e.g., tax records). The core of the method is to draw pseudodata from a mixture between the income empirical distribution and a parametric model for the upper tail, that aggregate to a preestablished top income share. We illustrate the procedure using Peruvian surveys that, as in the rest of Latin America, have displayed a sustained decrease in the Gini index since the 2000s. In a number of experiments, we impose a larger top income share than the one observed in the data, closer to corrected estimates for less egalitarian neighbors (e.g., Colombia and Chile). We find that even though the point estimates of the Gini index are biased, the corrected indices still decrease in time.

Original languageEnglish
Pages (from-to)223-243
Number of pages21
JournalJournal of Economic Inequality
Issue number1
StatePublished - Mar 2022

Bibliographical note

Publisher Copyright:
© 2022, The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.


  • Income inequality
  • Latin America
  • Top income share


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