The distribution of income is worse than you think: Including pollution impacts into measures of income inequality

PLoS One. 2018 Mar 21;13(3):e0192461. doi: 10.1371/journal.pone.0192461. eCollection 2018.

Abstract

This paper calculates the distribution of an adjusted measure of income that deducts damages due to exposure to air pollution from reported market income in the United States from 2011 to 2014. The Gini coefficient for this measure of adjusted income is 0.682 in 2011, as compared to 0.482 for market income. By 2014, we estimate that the Gini for adjusted income fell to 0.646, while the market income Gini did not appreciably change. The inclusion of air pollution damage acts like a regressive tax: with air pollution, the bottom 20% of households lose roughly 10% of the share of income, while the top 20% of households gain 10%. We find that, unlike the case for market income, New England is not the most unequal division with respect to adjusted income. Further, the difference between adjusted income for white and Hispanics is smaller than expected. However, the gap in augmented income between whites and African-Americans is widening.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • African Americans*
  • Air Pollution*
  • Family Characteristics*
  • Female
  • Humans
  • Income*
  • Male
  • New England
  • Poverty*

Grant support

This work was supported by the United States Environmental Protection Agency: EPA-G2014-STAR-J1. Center for Air, Climate, and Energy Solutions (CACES). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.