Income and consumption inequality in Poland, 1998-2008

Abstract

This paper estimates a variety of inequality indices to study the evolution of income and consumption inequality in Poland between 1998 and 2008. We use robust methods to adjust for the impact of extremely large observations. We also conduct statistical tests on inequality changes using methods, which account for the complexity of the household sample design. All analyses are performed for the entire population, for rural and urban subpopulations, and for the three largest cities. The main result is that during 1998–2008 there was a statistically significant rise in economic inequalities in Poland, which depending on the inequality index, ranged from 8.7% to 19.6% in case of income distribution and from 6.5% to 12.3% in case of consumption distribution. Among the studied subpopulations, economic inequalities are both the highest and the fastest-growing in Warsaw, where consumption inequality as measured by the Gini index increased during the studied period by as much as almost 23%.