Abstract

GALVEZ-SORIANO, Oscar de J.  and  BENITEZ-BLACIO, Paulina. How to Measure the Multidimensional Inequality with Household Surveys: The Mexican Case. Rev. mex. econ. finanz [online]. 2018, vol.13, n.2, pp.175-193. ISSN 2448-6795.  https://doi.org/10.21919/remef.v13i2.274.

In this research paper we propose a measure of inequality with a multidimensional approach. For that purpose, we use a Principal Component Analysis for a set of variables that characterize the households of an economy. Specifically, the proposed methodology is tested using data from Mexico’s National Household Income and Expenses Survey. The results are consistent with those of conventional measures of inequality when we analyze them between two periods of time. However, when the inequality among the States of Mexico is analyzed, the proposed index identifies greater inequality in those where there are gaps in services and poor housing conditions. The methodology that we propose is innovative to analyze multidimensional inequality and its implementation is easier to handle with than the one of the recent methods proposed by the literature. Based on our results, we suggest that if policymakers try to implement an income redistribution, this must be accompanied by an improvement in services that government offers, with an especial attention in education.

Keywords : D31; C81; I31.; Inequality; Gini Coefficient; Principal Component Analysis; Household Income; Multidimensional Index.

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