Global and regional inequality in the distribution of income: Estimation with limited and incomplete data

Chotikapanich, Duangkamon; Valenzuela, Rebecca; Rao, D. S. Prasada

doi:10.1007/bf01205778

Cited by 78 publications

(28 citation statements)

References 13 publications

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“…Milanovic (2002) has derived world income distribution, the first time such a distribution was calculated from individual countries' household surveys-formally in the same way as one would calculate national income distribution from regional distributions of household incomes. Similar computations were also recently performed by T. Paul Schultz (1998), Chotikapanich, Valenzuela, and Rao (1997), Korzeniewick and Moran (1997), and Firebaugh (1999). They deal either with international inequality (inequality between mean countries' incomes where importance of each country is weighted by its population), or try to approximate world inequality assuming that each country displays a log-normal distribution of income.…”

Section: Introductionmentioning

confidence: 93%

Decomposing World Income Distribution: Does The World Have A Middle Class?

Milanović

2002

Review of Income and Wealth

201

100

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Using the national income͞expenditure distribution data from 111 countries, we decompose total inequality between the individuals in the world, by continents and regions. We use Yitzhaki's Gini decomposition which allows for an exact breakdown of the Gini. We find that Asia is the most heterogeneous continent; between-country inequality is much more important than inequality in incomes within countries. At the other extreme is Latin America where differences between the countries are small, but inequalities within the countries are large. Western Europe͞North America is fairly homogeneous both in terms of countries' mean incomes and income differences between individuals. If we divide the world population into three groups: the rich (those with incomes greater than Italy's mean income), the poor (those with incomes less than Western countries' poverty line), and the middle class, we find that there are only 11 percent of people who are ''world middle class''; 78 percent are poor, and 11 percent are rich.

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Section: Introductionmentioning

confidence: 93%

Decomposing World Income Distribution: Does The World Have A Middle Class?

Milanović

2002

Review of Income and Wealth

201

100

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“…His analysis is based on a between‐country component which reflects differences in Purchasing power parity ($PPP) GDPs per capita, and a within‐country component where an inequality measure (log variance) for each individual country was obtained from a regression analysis using the Deininger and Squire (1996) data base. A very similar approach was adopted by Chotikapanich et al. (1997).…”

Section: Previous Workmentioning

confidence: 99%

True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone

Milanović

2002

The Economic Journal

509

274

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The paper derives world income or expenditure distribution of individuals for 1988 and 1993. It is the first paper to calculate world distribution for individuals based entirely on household surveys from 91 countries, and adjusted for differences in purchasing power parity between countries. Measured by the Gini index, inequality increased from 63 in 1988 to 66 in 1993. The increase was driven more by differences in mean incomes between countries than by inequalities within countries. The most important contributors were rising urban‐rural differences in China, and slow growth of rural incomes in South Asia compared to several large developed economies.

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“…While likely to provide only an approximation, the assumption of the log normal distribution of the income distribution is often used in the empirical literature to estimate income distributions (see, e.g., Bourguignon, 2003;Chotikapanich, Valenzuela, & Rao, 1997;Milanovic, 2002;Milanovic, 2006;Schultz, 1998). Clearly, this does not imply that we accept the log-normal as the true distribution for income data, it rather means that the data at hand do not contain enough information to fit a more sophisticated model.…”

Section: Methodology (A) Calculating the Gni Indexmentioning

confidence: 96%

A Household-Based Human Development Index

Harttgen

Klasen

2012

World Development

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One of the most serious weaknesses of the human development index (HDI) is that it does not take into account the distribution of human development within a country. All attempts to capture inequality in the HDI have used aggregate information and there exists no HDI at the household level. We provide a method for proxying the HDI at the household level. This allows the immediate analysis of human development by population subgroups and/or socioeconomic characteristics as well as analysis of inequality in human development across population subgroups and households characteristics. We illustrate our approach for 15 developing countries. Inequality in the HDI is stunningly large for some countries, particularly in countries with low overall human development, driven mostly by very high inequality in the education and income components of the HDI.

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Global and regional inequality in the distribution of income: Estimation with limited and incomplete data

Cited by 78 publications

References 13 publications

Decomposing World Income Distribution: Does The World Have A Middle Class?

Decomposing World Income Distribution: Does The World Have A Middle Class?

True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone

A Household-Based Human Development Index

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