Visualizing the evolution of income inequality

Abstract

The reporting of only relative inequalities is decreasing and other inequality invariance criteria are often being considered simultaneously. Having multiple measures with potentially different conclusions on whether inequality has increased or decreased complicates communicating what these results imply about the evolution of income inequality. To facilitate understanding this evolution, we highlight the advantage of visualizing in a single graph the relationship between changes in mean income and the development of inequality according to multiple inequality invariance criteria. Not presenting how these entities relate may mislead policy makers about the evolution of income inequality and its potential causes.