Inequality and the Tails: The Palma Proposition and Ratio

Alex Cobham*, Lukas Schlögl, Andy Sumner

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

31 Citations (Scopus)


The Palma Proposition is that changes in income or consumption inequality are (almost) exclusively due to changes in the share of the richest 10 per cent and poorest 40 per cent because the 'middle' group between the richest and poorest tend do capture approximately 50 per cent of gross national income (GNI). The Palma Ratio is a measure of income or consumption concentration based on the above-mentioned proposition and calculated as the GNI capture of the richest 10 per cent divided by that of the poorest 40 per cent. In this paper we revisit the empirical basis of the Palma Proposition (the relative stability of the 'middle') with a new and expanded data set across and within developing and developed countries. We find the data reaffirms the Palma Proposition and that the proposition is getting stronger over time.

Original languageEnglish
Pages (from-to)25-36
Number of pages12
JournalGlobal Policy
Issue number1
Early online date23 Feb 2016
Publication statusPublished - Feb 2016


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