The purpose of this paper is to examine the distributional implications of using full income instead of disposable income in the analysis of economic inequality. For that purpose the authors employ a very extensive list of noncash incomes with the aim of examining the distributional effects of noncash incomes and reassessing the level and structure of inequality under a comprehensive definition of income.
The study employs the microdata of the 2004/2005 Greek Household Budget Survey. The value of non‐monetary components was estimated using the appropriate statistical methods and econometric techniques. Tools of income distribution analysis were utilized for assessing the distributional consequences of adopting an extended definition of income.
The results indicate that both private and public noncash incomes are far more equally distributed than monetary income, but the inequality‐reducing effect of publicly‐provided services is stronger. Noncash incomes appear to accrue more heavily to younger and older individuals.
The analysis uses the same equivalence scales for the analysis of both monetary income and full income. This treatment may be open to criticism in the case of in‐kind public transfers. Due to data limitations the authors do not take into account home‐produced services, as well as several in‐kind transfers such as the provision of elderly care.
The study argues in favor of moving beyond disposable income for measuring inequality and for the purposes of social policy design.
Even if several studies take into account particular noncash items, there is an important void in the distributional analysis of full income.
Koutsampelas, C. and Tsakloglou, P. (2013), "The distribution of full income in Greece", International Journal of Social Economics, Vol. 40 No. 4, pp. 311-330. https://doi.org/10.1108/03068291311305008
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