The sam’s global multiplier matrix as a ‘‘structural’’ inequality measure of personal income distribution

digital

Article

Magazine

STATISTICA & APPLICAZIONI

Section

Open Access

Title

The sam’s global multiplier matrix as a ‘‘structural’’ inequality measure of personal income distribution

Authors

Marisa Civardi, Renata Targetti Lenti

Publisher

Vita e Pensiero

Format

Article |

Pdf

Online from

12-2021

Doi

10.26350/999999_000044

Issn

1824-6672 (print) | 2283-6659 (digital)

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Aim of this paper is to introduce the ‘‘global multipliers matrix’’ as a ‘‘structural’’ inequality measure of personal income distribution. This measure is derived from the Social Accounting Matrix, considered as a linear model. The multiplier approach allows quantifying the different ways by which, an income equally earned by each Household’s group, turns into different disposable income levels through the three stages of spending, production and distribution. The resulting inequality in personal income distribution can be considered as the minimum inequality compatible with the given productive and spending structures, and hence as a result of the mechanism explicitly considered in the model. The multiplier matrix allows highlighting different features of personal income distribution and its inequality’s level. In particular: i) the extent to which each sector of activity contribute to the distribution of value added (primary income) over the different household groups; ii) how the composition of production factors’s ownership is linked to the intrahousehold inequality; iii) the impact of different fiscal and redistributive policies which translate into changes in disposable incomes of different household groups. This approach, we argue, allows for the assessment and evaluation of the effects of ‘‘new policies’’, aimed at reducing poverty and inequality ex-ante and not only ex-post. Some numerical example, referred to the Italian economy, allow quantifying how the different policies translate into different inequality levels. One meaningful result is that an exogenous injection in any account (Activities, Factors, Private Institutions) ends in benefiting the richest ones. In our example, the market and production shapes in Italy seem to have a very low power to generate income for the poorest Household groups. Inequality in the personal income distribution seems to be a structural feature of our system. Therefore it can be better assessed with the multiplier approach instead of using only traditional ‘‘synthetic’’ measures as Gini, Palma or Zenga indexes.

keywords

SAM, Personal Income Distribution, Inequality

Authors biography

Marisa Civardi: Emeritus Professor - Università Milano-Bicocca - Via Bicocca degli Arcinboldi, 8 - 20126 MILANO (e-mail: marisa.civardi@unimib.it). Renata Targetti Lenti: Emeritus Professor - Università degli Studi di Pavia - Strada Nuova, 65 - 27100 PAVIA (e-mail: targetti@unipv.it).

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