A New Measure of Inequality in Asian Economies

Abstract

The paper describes a new measure of inequality the Pashum ratio, which was first used in the UNDP Human Development Report for 2020 of Pakistan. The latest estimates of the extent of income inequality are derived from 18 Asian economies using the Gini coefficient and the Pashum ratio respectively. The relative position of nine out of the 18 countries varies in the two measures. Also, the greatest inequality among quintiles is observed in virtually all countries between the top and the second quintile. A number of inequality measures have been developed in the literature. The first and the simplest measure is the quintile dispersion ratio which is the ratio of the share of the top quintile and the bottom quintile. This measure focuses only on the extreme of a distribution.