Global Income Inequality and Cost-of-Living Adjustment: The Geary–Allen World Accounts
AbstractStandard ways of measuring real income are known to be inconsistent with consumer preferences. We provide preference-consistent estimates of real income, based on the income-specific price indices that are consistent with nonhomothetic preferences. We find that existing measures, such as Geary, GEKS and GAIA, create systematic biases: the poorer is a country, the more its income is overestimated by these measures. Consequently, international income inequality is underestimated by the same measures.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, Norwegian School of Economics in its series Discussion Paper Series in Economics with number 20/2012.
Length: 33 pages
Date of creation: 01 Nov 2012
Date of revision:
Contact details of provider:
Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Phone: +47 55 959 277
Fax: 5595 9100
Web page: http://www.nhh.no/sam/
More information through EDIRC
Find related papers by JEL classification:
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D30 - Microeconomics - - Distribution - - - General
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- F01 - International Economics - - General - - - Global Outlook
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-11 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Banks, J & Blundell, R & Lewbel, A, 1997.
"Quadratic engel curves and consumer demand,"
Open Access publications from University College London
http://discovery.ucl.ac.u, University College London.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- W. Erwin Diewert, 1999.
"Axiomatic and Economic Approaches to International Comparisons,"
in: International and Interarea Comparisons of Income, Output, and Prices, pages 13-107
National Bureau of Economic Research, Inc.
- W. Erwin Diewert, 1996. "Axiomatic and Economic Approaches to International Comparisons," NBER Working Papers 5559, National Bureau of Economic Research, Inc.
- Angus Deaton & Alan Heston, 2008.
"Understanding PPPs and PPP-based national accounts,"
NBER Working Papers
14499, National Bureau of Economic Research, Inc.
- Angus Deaton & Alan Heston, 2010. "Understanding PPPs and PPP-Based National Accounts," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 1-35, October.
- Angus Deaton & Alan Heston, 2008. "Understanding PPPs and PPP-based national accounts," Working Papers Understanding_PPPs_comple, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
- Angus Deaton & Alan Heston, 2009. "Understanding PPPs and PPP-based national accounts," Working Papers deaton_heston_complete_no, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
- Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
- R, Blundell & Jean-Marc Robin, 1997.
"Estimation in Large and Dissagregated Demand Systems : An Estimator for Conditionally Linear Systems,"
97-08, Centre de Recherche en Economie et Statistique.
- Blundell, Richard & Robin, Jean Marc, 1999. "Estimation in Large and Disaggregated Demand Systems: An Estimator for Conditionally Linear Systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(3), pages 209-32, May-June.
- Steve Dowrick & Muhammad Akmal, 2005. "Contradictory Trends In Global Income Inequality: A Tale Of Two Biases ," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 201-229, 06.
- Angus Deaton & Olivier Dupriez, 2011.
"Purchasing Power Parity Exchange Rates for the Global Poor,"
American Economic Journal: Applied Economics,
American Economic Association, vol. 3(2), pages 137-66, April.
- Angus Deaton & Olivier Dupriez, 2009. "Purchasing power parity exchange rates for the global poor," Working Papers Purchasing_power_parity_e, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
- Cooper, Russel J & McLaren, Keith R, 1996. "A System of Demand Equations Satisfying Effectively Global Regularity Conditions," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 359-64, May.
- Hill, Robert J., 2000. "Measuring substitution bias in international comparisons based on additive purchasing power parity methods," European Economic Review, Elsevier, vol. 44(1), pages 145-162, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dagny Hanne Kristiansen).
If references are entirely missing, you can add them using this form.