On the Theoretical and Methodological Context of Cross-National Inequality Data

The growing interest in economic inequality across the social sciences has coincided with a proliferation of new, cross-national survey data and research findings. In this article, the author argues for a more critical and careful interpretation of the data and techniques used to quantify and analyze income distributions. First, the theoretical underpinnings of the popular Gini index are discussed in relation to what the index does and does not measure. Then, two issues involving the application of inequality measures such as the Gini index are assessed: (1) the high sensitivity of the index to the methodological decisions upon which it is based; and (2) the subjectivity necessarily involved with interpreting its absolute magnitude and intertemporal change. The impact of these issues is substantiated via an analysis of the most recent data on inequality in the industrialized countries of the world, demonstrating how researchers' methodological choices can significantly impact their sociological conclusions. The article ends by discussing various solutions to these conceptual problems.