Measurement of income inequality not difficult but tedious
Dear Editor,
Please allow me to respond to Mr. Frederick Kissoon’s letter `It is not difficult to measure ethnic distribution of income and wealth’ (SN, 23/07/2020) in which he offers a sincere apology for calling myself and Dr. Ramesh Gampat dishonest a few years ago. I accept the
apology. I want to make it clear that Mr. Kissoon’s columns are an invaluable research resource on Guyanese political economy. I have made use of them in the past.
The measurement of income inequality is not methodologically or mathematically difficult, but it is extremely tedious in any context, let alone Guyana. Ethnic and wealth inequality add another layer of tediousness and complexity. I wanted to pursue this topic for my PhD thesis back in 2004, but could not get access to the GRA data. I was not going to study ethnic income inequality per se, but that could have been reported. I was more interested in the general measurement of inequality. I switched topics and focused since on monetary aspects of economic development. Given the political discontents in Guyana, I have dabbled in academic research relating to political economics although it is not my primary focus.
The GRA dataset, of course, presents its own challenges as it relates to compliance and reporting. Doing this study by stratified samples is also problematic since a percentage of people tend to underreport income, but there are some strategies to get around this. It requires a lot of time and money to build the kind of micro-level dataset necessary to study these topics. The Bureau of Statistics has some village-level statistics but first these have to be processed for easy access and analyses. I am not aware this data is in the form of SAS (Statistical Analytics Software), which makes it easy to access and estimate descriptive and inferential models. My career stage as a data entry clerk is over.
The University of Guyana has the human capital to get these crucial works done. This work needs a team of researchers, not a single person. The information gathered from this research can banish the dem-boys-seh kind of observations in some quarters and greatly benefit public policy (particularly at budget compilation). It is very likely that the PPP will govern as it has always governed. The country will need data-based and informed criticisms of the PPP and not get too emotional and carried away with dem-boys-seh accusations, as was done in the past.
One final note, Piketty’s masterpiece never studied ethnic distribution of income, let alone wealth inequality in terms of deciles (class) and ethnicity. So, telling us that because Piketty did it we should too is ignoring how difficult and tedious a research topic this is. Some of the arguments made in the letter columns over the years are really speaking to ethno-wealth inequality. I have done a few columns on this matter; therefore, I will not repeat myself here. Dr. Gampat took the brave step to analyze housing-stock inequality. Housing is a major form of wealth. Dr. Collin Constantine published a macro-level paper on income inequality in 2017.
I leave it to the locals to take up this most important research agenda. As a matter of fact, a youngster at UG can make an academic career studying income and wealth inequality. It is a lot of work, however.