nep-lam New Economics Papers
on Central and South America
Issue of 2016‒04‒09
two papers chosen by
Maximo Rossi
Universidad de la República

  1. Inequality and top incomes in Uruguay: a comparison between household surveys and income tax micro-data By Gabriel Burdín; Fernando Esponda; Andrea Vigorito
  2. Price-Setting Behavior in Brazil: survey evidence By Arnildo da Silva Correa; Myrian Beatriz S. Petrassi; Rafael Santos

  1. By: Gabriel Burdín; Fernando Esponda; Andrea Vigorito
    Abstract: After increasing over more than a decade, recent studies based on household surveys data show that income inequality in Uruguay started to decline in 2008. In this study we assess whether this trend is robust to the use of novel micro-data from the recently restored Uruguayan personal income tax for the years 2009-2011. We analyze primary income and pensions and carry out to main comparative exercises. In the first part of the paper, we adjust household surveys to make them comparable to tax records. After that, we follow the methodology proposed by Atkinson et al (2011) and Alvaredo (2011) to compute top income shares and corrected inequality measures. We also investigate the redistributive effect of the personal income tax burden in the two data sets. Inequality indexes depict a similar trend in inequality reduction, even though the decrease is less sharp in tax records than in harmonized household surveys. According to our estimations from income tax data, the share of the top 1% did not decline in this period, and was situated around 14%. Household survey data underestimate the share of the top 1% in total income by approximately 3 p.p. and depict an opposite trend in the top shares evolution throughout the period compared to the one observed in income tax micro-data. This result might be revealing an increasing difficulty of ECH for capturing very high incomes. Finally, personal income tax in Uruguay redistributes roughly 2 p.p. of the Gini index. Effective tax rates exhibit a progressive pattern in the case of total income, labour income and pensions, whereas they are slightly regressive when considering capital income.
    Keywords: top incomes, income inequality, personal income taxation, Uruguay
    JEL: D31 H24 O54
    Date: 2014–05
    URL: http://d.repec.org/n?u=RePEc:tul:ceqwps:1321&r=lam
  2. By: Arnildo da Silva Correa; Myrian Beatriz S. Petrassi; Rafael Santos
    Abstract: Price surveys became popular after the seminal work of Blinder (1991) exploring the price-setting practices of the US firms, which filled some blanks left by the simple observation of prices charged by firms. The present paper reports the findings of a survey conducted by the Central Bank of Brazil with local firms. The sample covered 7,002 firms, the entire country and 3 economic sectors: manufacturing, services and commerce. The collected answers suggest important features about price-setting behavior in Brazil, such as: (i) the cost of reviewing price are low, but there is important nominal rigidity – firms report that change prices 3.6 times per year –, (ii) state-dependent rules seem to be more frequent than time-dependent behavior, (iii) markup pricing appears to be the dominant strategy, and (iv) the two most important factors driving price changes are the cost of intermediate goods and the inflation rate. A complete description of the results is found throughout the paper and summarized in the final section. The paper also discusses some policy implications from the results
    Date: 2016–03
    URL: http://d.repec.org/n?u=RePEc:bcb:wpaper:422&r=lam

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