Relative Poverty and Consumption Inequality behind Massive Protests in Chile
- Author Sungwoo Hong
Previous literature on income inequality tends to investigate Latin America as a whole or rely on specific indicators such as the Gini coefficient. This approach could make it difficult to accurately grasp the situation that recently faces each Latin American country. In this context, it is necessary to examine both relative poverty and consumption inequality as complementary indicators of income inequality. In Chile, based on these two indicators, the relative poverty rate has risen, and the income gap between high and low income class has increased even though the absolute poverty rate has fallen from 2011 to 2017. However, the consumption gap between the groups has shrunk for the same period, having the result of aggravating the financial pressure of the low-income group. The massive protests in Chile seem to be led by the cumulative consequence of these phenomena. Therefore, it is important to comprehensively look into a variety of indicators when investigating the income inequality problem in Lat-in America.
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