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Department ofEconomics

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Asset Inequality in MENA: The Missing Dimension?

Shireen AlAzzawi and Vladimir Hlasny

Quarterly Review of Economics and Finance 73, pp 44-55, August 2019

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Abstract

 

 We use panel surveys and wealth indexes based on households’ production and non-production assets to examine economic inequality in three MENA countries – Egypt, Jordan and Tunisia. The exercise complements the traditional measures of inequality based on income and consumption and allows us to gauge the inequality of a variety of lifetime welfare dimensions. We evaluate wealth distribution and households’ economic mobility across surveys. To mitigate ordinality of wealth indexes, we benchmark them by applying relative asset prices estimated in one survey to other surveys. We find that wealth gaps are significant across urban-rural and educated-uneducated divides. While household wealth and earnings are positively correlated, they have different distributions and different trends over time. In Egypt wealth rose for the majority of households over time, but fell for the poorest five percent. Finally, production and non-production assets appear to be substitutes bought for different purposes across households, with different implications for welfare and inequality.

 

 

LSB Research, ECON, 2019, Shireen Al-Azzawi