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Abstract:
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The determinants and correlates of the income distribution have received a high attention in the economics and public policy literature in the past few decades. Despite the criticism it has received, the Gini coefficient remains the most commonly used measure of income distribution. As an aggregate measure, the Gini coefficient does not reflect the special features of the income distribution where different income distributions can have the same value of Gini coefficient. The aim of this paper is to develop a compositional model for country-level income distribution using relevant economic and development indicators. The developed model should help in identifying the determinants of income inequality and their impact on the individual income compositions. The proposed model will be compared with the corresponding model based on Gini coefficient.
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