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

Author

Listed:
  • Hajo Holzmann

    (Georg-August-Universität Göttingen / Germany)

  • Sebastian Vollmer

    () (Georg-August-Universität Göttingen / Germany)

  • Julian Weisbrod

    () (Georg-August-Universität Göttingen / Germany)

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.

Suggested Citation

  • Hajo Holzmann & Sebastian Vollmer & Julian Weisbrod, 2007. "Perspectives on the World Income Distribution - Beyond Twin Peaks Towards Welfare Conclusions," Ibero America Institute for Econ. Research (IAI) Discussion Papers 158, Ibero-America Institute for Economic Research.
  • Handle: RePEc:got:iaidps:158
    as

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    References listed on IDEAS

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    1. 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.
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    5. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    6. 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).
    7. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    8. Charles I. Jones, 1997. "On the Evolution of the World Income Distribution," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 19-36, Summer.
    9. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
    10. Quah, Danny, 2002. "One Third of the World's Growth and Inequality," WIDER Working Paper Series 038, World Institute for Development Economic Research (UNU-WIDER).
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    14. Theo S Eicher & Cecilia Garcia Penalosa, "undated". "Inequality and Growth," Working Papers 0083, University of Washington, Department of Economics.
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    Citations

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    Cited by:

    1. Dai, J. & Sperlich, S., 2010. "Simple and effective boundary correction for kernel densities and regression with an application to the world income and Engel curve estimation," Computational Statistics & Data Analysis, Elsevier, vol. 54(11), pages 2487-2497, November.
    2. Lahoti Rahul & Jayadev Arjun & Reddy Sanjay, 2016. "The Global Consumption and Income Project (GCIP): An Overview," Journal of Globalization and Development, De Gruyter, vol. 7(1), pages 61-108, June.
    3. Rahul Lahoti & Arjun Jayadev & Sanjay G. Reddy, 2016. "The Global Consumption and Income Project (GCIP): An Overview," LIS Working papers 655, LIS Cross-National Data Center in Luxembourg.

    More about this item

    Keywords

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

    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • F0 - International Economics - - General

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