Income Inequality Ratio for Latin America and the Caribbean

LAC Equity Lab data quantifies income disparity by comparing the average income of the richest 25% to the poorest 25% across economies. This decile dispersion ratio provides a focused measure of inequality at the extremes of the income distribution. The dataset is produced by the World Bank's LAC Equity Lab.

Use Cases

• Analyze trends in the 75/25 income ratio over time to assess changes in economic disparity.
• Compare the decile dispersion ratio across different countries in the Latin America and Caribbean region.
• Correlate the income ratio with other economic indicators like GDP per capita or poverty headcount ratios.
• Use the ratio as a target variable for models predicting the impact of fiscal or social policies on inequality.

Strengths

• Provides a specific, standardized metric for comparing income inequality across economies.
• Focuses on the extremes of the income distribution, highlighting disparity between the top and bottom quartiles.

Limitations

• Ignores information about incomes in the middle of the distribution, offering an incomplete picture.
• Does not account for the distribution of income within the top and bottom quartiles themselves.
• Sample size, temporal coverage, and geographic scope are unspecified.

Provenance

Source

World Bank LAC Equity Lab

Collection Method

Calculated from household survey data, presenting the ratio of average income of the richest 25% to the poorest 25%.

Geography

Latin America and the Caribbean region (specific countries unknown).