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Perspectives on the World Income Distribution: Beyond Twin Peaks Towards Welfare Conclusions

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Author Info
Weisbrod, Julian
Vollmer, Sebastian
Holzmann, Hajo

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Abstract

This paper contributes towards the growing debate concerning the world distribution of income and its evolution over that past three to four decades. Our methodological approach is twofold. First, we formally test for the number of modes in a cross-sectional analysis where each country is represented by one observation. We contribute to existing studies with technical improvements of the testing procedure, enabling us to draw new conclusions, and an extension of the time horizon being analyzed. Second, we estimate a global distribution of income from national log-normal distributions of income, as well as a global distribution of log-income as a mixture of national normal distributions of log-income. From this distribution we obtain measures for global inequality and poverty as well as global growth incidence curves.

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Göttingen 2007 with number 32.

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Date of creation: 2007
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Handle: RePEc:zbw:gdec07:6555

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Related research
Keywords: Convergence; Silverman's test; non-parametric statistics; bimodal; global income distribution; poverty; inequality; growth incidence curves;

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Find related papers by JEL classification:
F0 - International Economics - - General
O0 - Economic Development, Technological Change, and Growth - - General
C5 - Mathematical and Quantitative Methods - - Econometric Modeling
I3 - Health, Education, and Welfare - - Welfare and Poverty

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  1. Charles I. Jones, . "On the Evolution of the World Income Distribution," Working Papers 97009, Stanford University, Department of Economics. [Downloadable!]
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  2. Theo S Eicher & Cecilia Garcia Penalosa, . "Inequality and Growth," Discussion Papers in Economics at the University of Washington 0083, Department of Economics at the University of Washington. [Downloadable!]
    Other versions:
  3. Sala-i-Martin, Xavier X, 1996. "The Classical Approach to Convergence Analysis," Economic Journal, Royal Economic Society, vol. 106(437), pages 1019-36, July. [Downloadable!] (restricted)
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  4. Michael Kremer & Alexei Onatski & James Stock, 2001. "Searching for Prosperity," NBER Working Papers 8250, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. François Bourguignon, 2002. "The growth elasticity of poverty reduction : explaining heterogeneity across countries and time periods," DELTA Working Papers 2002-03, DELTA (Ecole normale supérieure). [Downloadable!]
  6. T. Paul Schultz, 1998. "Inequality in the distribution of personal income in the world: How it is changing and why," Journal of Population Economics, Springer, vol. 11(3), pages 307-344. [Downloadable!] (restricted)
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  7. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE. [Downloadable!]
  8. Quah, Danny, 2002. "One Third of the World's Growth and Inequality," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  9. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January. [Downloadable!] (restricted)
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  10. Quah, Danny, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEPR Discussion Papers 1355, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  11. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May. [Downloadable!] (restricted)
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  12. Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence," Papers 645, Yale - Economic Growth Center.
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  13. Ravallion, M. & Datt, G., 1991. "Growth and Redistribution Components of Changes in Poverty Measures," Papers 83, World Bank - Living Standards Measurement.
  14. Quah, Danny, 2002. "One Third of the World's Growth and Inequality," CEPR Discussion Papers 3316, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  15. Theil, Henri & Theil, Henri, 1979. "World income inequality and its components," Economics Letters, Elsevier, vol. 2(1), pages 99-102. [Downloadable!] (restricted)
  16. Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  17. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April. [Downloadable!] (restricted)
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