IDEAS home Printed from https://ideas.repec.org/p/bdi/wptemi/td_701_09.html
   My bibliography  Save this paper

On analysing the world distribution of income

Author

Listed:
  • Anthony Barnes Atkinson

    (Nuffield College, Oxford)

  • Andrea Brandolini

    (Bank of Italy)

Abstract

This paper argues that consideration of world inequality should cause us to re-examine the key concepts underlying the welfare approach to the measurement of income inequality and the inter-relation between the measurement of inequality and the measurement of poverty. There are three reasons why we feel that a re-examination is necessary: (i) the extent of global income differences means that we cannot simply carry over the methods used at a national level; we need a more flexible measure; (ii) we have to reconcile measures of world inequality and world poverty; and (iii) we need to explore more fully the different ways in which measures may be relative or absolute. This leads us to propose a new measure, which (a) combines poverty and inequality, including provision for those who are concerned only with poverty, (b) incorporates different approaches to the measurement of inequality; and (c) allows the cost of inequality to be expressed in different ways. Applied to the world distribution for the period 1820-1992, the new measure provides different perspectives on the evolution of global inequality.

Suggested Citation

  • Anthony Barnes Atkinson & Andrea Brandolini, 2009. "On analysing the world distribution of income," Temi di discussione (Economic working papers) 701, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_701_09
    as

    Download full text from publisher

    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2009/2009-0701/en_tema_701.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. Branko Milanovic, 2002. "True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone," Economic Journal, Royal Economic Society, vol. 112(476), pages 51-92, January.
    3. 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;European Society for Population Economics, vol. 11(3), pages 307-344.
    4. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    5. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    6. Sheshinski, Eytan, 1972. "Relation between a social welfare function and the gini index of income inequality," Journal of Economic Theory, Elsevier, vol. 4(1), pages 98-100, February.
    7. Christiansen, Vidar & Jansen, Eilev S., 1978. "Implicit social preferences in the Norwegian system of indirect taxation," Journal of Public Economics, Elsevier, vol. 10(2), pages 217-245, October.
    8. Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and … Convergence, Period," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 351-397.
    9. Bossert, Walter & Pfingsten, Andreas, 1990. "Intermediate inequality: concepts, indices, and welfare implications," Mathematical Social Sciences, Elsevier, vol. 19(2), pages 117-134, April.
    10. Frank A. Cowell, 1980. "On the Structure of Additive Inequality Measures," Review of Economic Studies, Oxford University Press, vol. 47(3), pages 521-531.
    11. Sen, Amartya, 1983. "Poor, Relatively Speaking," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 153-169, July.
    12. Angus Deaton, 2005. "ERRATUM: Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, May.
    13. Atkinson, A. B., 1990. "Public economics and the economic public," European Economic Review, Elsevier, vol. 34(2-3), pages 225-248, May.
    14. Martin Feldstein, 2005. "Rethinking Social Insurance," American Economic Review, American Economic Association, vol. 95(1), pages 1-24, March.
    15. Kolm, Serge-Christophe, 1976. "Unequal inequalities. II," Journal of Economic Theory, Elsevier, vol. 13(1), pages 82-111, August.
    16. Chotikapanich, Duangkamon & Valenzuela, Rebecca & Rao, D S Prasada, 1997. "Global and Regional Inequality in the Distribution of Income: Estimation with Limited and Incomplete Data," Empirical Economics, Springer, vol. 22(4), pages 533-546.
    17. Kanbur, Ravi, 2008. "Globalization, Growth and Distribution: Framing The Questions," Working Papers 51105, Cornell University, Department of Applied Economics and Management.
    18. Satya Chakravarty & Ravi Kanbur & Diganta Mukherjee, 2006. "Population growth and poverty measurement," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 26(3), pages 471-483, June.
    19. Blackorby, Charles & Donaldson, David, 1980. "A Theoretical Treatment of Indices of Absolute Inequality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 107-136, February.
    20. Coral del RÎo & Javier Ruiz-Castillo, 2000. "Intermediate inequality and welfare," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(2), pages 223-239.
    21. Mirrlees, J. A., 1978. "Social benefit-cost analysis and the distribution of income," World Development, Elsevier, vol. 6(2), pages 131-138, February.
    22. Sudhir Anand & Paul Segal, 2008. "What Do We Know about Global Income Inequality?," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 57-94, March.
    23. François Bourguignon & Christian Morrisson, 2002. "Inequality Among World Citizens: 1820-1992," American Economic Review, American Economic Association, vol. 92(4), pages 727-744, September.
    24. Anthony F. Shorrocks & James E. Foster, 1987. "Transfer Sensitive Inequality Measures," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 485-497.
    25. Sudhir Anand & Amartya Sen, 2000. "The Income Component of the Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 1(1), pages 83-106.
    26. Surjit Bhalla, 2002. "Imagine There's No Country: Poverty, Inequality, and Growth in the Era of Globalization," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 348, July.
    27. Kolm, Serge-Christophe, 1976. "Unequal inequalities. I," Journal of Economic Theory, Elsevier, vol. 12(3), pages 416-442, June.
    28. Sudhir Anand and Amartya Sen, 2000. "The Income Component of Human Development Index," Human Development Occasional Papers (1992-2007) HDOCPA-2000-01, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    29. Bourguignon, Francois & Levin, Victoria & Rosenblatt, David, 2006. "Global redistribution of income," Policy Research Working Paper Series 3961, The World Bank.
    30. del Rio, Coral & Ruiz-Castillo, Javier, 2001. "Intermediate Inequality and Welfare: The Case of Spain, 1980-81 to 1990-91," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 221-237, June.
    31. Foster, James E, 1998. "Absolute versus Relative Poverty," American Economic Review, American Economic Association, vol. 88(2), pages 335-341, May.
    32. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    33. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    34. Blackorby, Charles & Donaldson, David, 1978. "Measures of relative equality and their meaning in terms of social welfare," Journal of Economic Theory, Elsevier, vol. 18(1), pages 59-80, June.
    35. Amartya Sen, 1976. "Real National Income," Review of Economic Studies, Oxford University Press, vol. 43(1), pages 19-39.
    36. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    37. Yoram Amiel & John Creedy & Stan Hurn, 1999. "Measuring Attitudes Towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
    38. Ravallion, Martin, 2004. "Competing concepts of inequality in the globalization debate," Policy Research Working Paper Series 3243, The World Bank.
    39. Peter Svedberg, 2004. "World Income Distribution: Which Way?," Journal of Development Studies, Taylor & Francis Journals, vol. 40(5), pages 1-32.
    40. Jagdish N. Bhagwati, 2004. "In Defense of Globalization: It Has a Human Face," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 9-20, November-.
    41. 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, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miguel Niño‐Zarazúa & Laurence Roope & Finn Tarp, 2017. "Global Inequality: Relatively Lower, Absolutely Higher," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 661-684, December.
    2. Andrea Brandolini, 2006. "Measurement of Income Distribution in Supranational Entities: The Case of the European Union," LIS Working papers 452, LIS Cross-National Data Center in Luxembourg.
    3. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
    4. Clare Leaver & Paul Segal, 2014. "The Global Distribution of Income," Economics Series Working Papers 714, University of Oxford, Department of Economics.
    5. Pinkovskiy, Maxim L., 2013. "World welfare is rising: Estimation using nonparametric bounds on welfare measures," Journal of Public Economics, Elsevier, vol. 97(C), pages 176-195.
    6. Cockburn, John & Duclos, Jean-Yves & Zabsonré, Agnès, 2014. "Is global social welfare increasing? A critical-level enquiry," Journal of Public Economics, Elsevier, vol. 118(C), pages 151-162.
    7. Niño-Zarazúa, Miguel & Roope, Laurence & Tarp, Finn, 2014. "Global interpersonal inequality Trends and measurement," MPRA Paper 52881, University Library of Munich, Germany.
    8. La-Bhus Fah Jirasavetakul & Christoph Lakner, 2020. "The Distribution of Consumption Expenditure in Sub-Saharan Africa: The Inequality Among All Africans," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 29(1), pages 1-25.
    9. Paolo Liberati, 2015. "The World Distribution of Income And Its Inequality, 1970–2009," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 248-273, June.
    10. Leandro Prados de la Escosura, 2021. "Inequality Beyond GDP: A Long View," Working Papers 0210, European Historical Economics Society (EHES).
    11. Foster, James E. & Shneyerov, Artyom A., 2000. "Path Independent Inequality Measures," Journal of Economic Theory, Elsevier, vol. 91(2), pages 199-222, April.
    12. James E. Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster-Greer-Thorbecke (FGT) Poverty Measures: Twenty-Five Years Later," Working Papers 2010-14, The George Washington University, Institute for International Economic Policy.
    13. Niño-Zarazúa, Miguel & Roope, Laurence & Tarp, Finn, 2014. "Global interpersonal inequality Trends and measurement," MPRA Paper 52881, University Library of Munich, Germany.
    14. Satya R. Chakravarty, 2009. "Equity and efficiency as components of a social welfare function," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(2), pages 181-199, June.
    15. Ebert U., 1996. "Income inequality and differences in household size," Mathematical Social Sciences, Elsevier, vol. 31(1), pages 57-58, February.
    16. Jordá, Vanesa & Niño-Zarazúa, Miguel, 2019. "Global inequality: How large is the effect of top incomes?," World Development, Elsevier, vol. 123(C), pages 1-1.
    17. Satya Chakravarty & Swami Tyagarupananda, 2009. "The subgroup decomposable intermediate indices of inequality," Spanish Economic Review, Springer;Spanish Economic Association, vol. 11(2), pages 83-97, June.
    18. Christoph Lakner & Branko Milanovic, 2016. "Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession," World Bank Economic Review, World Bank Group, vol. 30(2), pages 203-232.
    19. Darvas, Zsolt, 2019. "Global interpersonal income inequality decline: The role of China and India," World Development, Elsevier, vol. 121(C), pages 16-32.
    20. Brandolini Andrea & Carta Francesca, 2016. "Some Reflections on the Social Welfare Bases of the Measurement of Global Income Inequality," Journal of Globalization and Development, De Gruyter, vol. 7(1), pages 1-15, June.

    More about this item

    Keywords

    global income inequality; absolute vs. relative inequality; poverty; world citizens;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdi:wptemi:td_701_09. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/bdigvit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/bdigvit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.