INEQUALITY AND ECONOMIC LEVEL IN THE EU-15 COUNTRIES. EMPIRICAL ANALYSIS USING THE ECHP (1994-2001)

The aim objective of this paper is to study the relationship between inequality and economic level for the EU-15 and member countries, as well as the evolution of both phenomena in period 1994-2001. Our variable is the disposable household income applying purchasing power parities and equivalence scales. The data base source is the European Community Household Panel (ECHP). We have quantified inequality levels through well-known indices with desirable properties (Gini, Atkinson 1 and Theil 0). We have used correlation and regression techniques to measure the association between inequality and income level, obtaining a negative relationship in the total of the EU as well as in several member countries.