An Investigation of the Palma Ratio for Turkey Both on National and Regional Level

Abstract

This paper aims to focus on concentration of income inequality in case of Turkey, based on the Palma ratio that is calculated as the ratio of the share of the top 10 percent income to the bottom 40 percent income. In this regard for the post-2001 period, the income shares of the deciles in Turkey both on national and regional (NUTS-1) level would be analyzed. It would be predicted that, this would provide more specific evidences about the dimensions of the hidden inequality. Within this context based on the descriptive statistics and income inequality decomposition analysis, robustness of the Palma ratio would be evaluated. While overlapping trend between the Palma ratio and the Gini coefficient is found to be significant both on national and regional level, the top10 percent income group represents the most distinctive feature in determining concentration of income inequality between and within the regions of Turkey.