| Even though Latin America is one of the most unequal regions of the world in terms of income, it has shown signs of improvement from the early 2000's to the middle 2010's. While other regions in the world have experienced growing inequality, Latin America has managed to decrease inequality in the same time period. This study aims to explain the relationship between the decrease of inequality, measured by the GINI coefficient, and commodity prices from 1990 to 2014. Using panel data from sixteen countries in Latin America and fixed effects models controlling for country and year, I find that the relationship is highly significant and with important magnitude. One of the results suggests that an increase of 10 percentage points in total rents as a percent of GDP will lead to a decrease of almost a whole GINI point. Other results suggest that rents, when disaggregated by type, have different behaviors, making coal and forest rents a disequalizing force increasing the GINI coefficient, and gas and oil rents an equalizing force. |
