IDEAS home Printed from
   My bibliography  Save this paper

A normal relationship ? Poverty, growth, and inequality


  • Lopez, Humberto
  • Serven, Luis


Using a large cross-country income distribution dataset spanning close to 800 country-year observations from industrial and developing countries, the authors show that the size distribution of per capita income is well approximated empirically by a lognormal density. The null hypothesis that per capita income follows a lognormal distribution cannot be rejected-although the same hypothesis is unambiguously rejected when applied to per capita consumption. The authors show that lognormality of per capita income has important implications for the relative roles of income growth and inequality changes in poverty reduction. When poverty reduction is the overriding policy objective, poorer and relatively equal countries may be willing to tolerate modest increases in income inequality in exchange for faster growth-more so than richer and highly unequal countries.

Suggested Citation

  • Lopez, Humberto & Serven, Luis, 2006. "A normal relationship ? Poverty, growth, and inequality," Policy Research Working Paper Series 3814, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3814

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Timothy J. Kehoe, 2003. "An evaluation of the performance of applied general equilibrium models of the impact of NAFTA," Staff Report 320, Federal Reserve Bank of Minneapolis.
    2. Jayatilleke S. Bandara & Wusheng Yu, 2003. "How Desirable is the South Asian Free Trade Area? A Quantitative Economic Assessment," The World Economy, Wiley Blackwell, vol. 26(9), pages 1293-1323, September.
    Full references (including those not matched with items on IDEAS)


    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Comment réduire la pauvreté dans un monde plus riche ?
      by ? in D'un champ l'autre on 2014-05-09 04:34:00


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2008. "What is the Impact of International Remittances on Poverty and Inequality in Latin America?," World Development, Elsevier, vol. 36(1), pages 89-114, January.
    2. 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.
    3. Goñi, Edwin & Humberto López, J. & Servén, Luis, 2011. "Fiscal Redistribution and Income Inequality in Latin America," World Development, Elsevier, vol. 39(9), pages 1558-1569, September.
    4. Gravier-Rymaszewska, Joanna & Tyrowicz, Joanna & Kochanowicz, Jacek, 2010. "Intra-provincial inequalities and economic growth in China," Economic Systems, Elsevier, vol. 34(3), pages 237-258, September.
    5. Thorsten Beck & Asli Demirgüç-Kunt & Maria Soledad Martinez Peria, 2008. "Banking Services for Everyone? Barriers to Bank Access and Use around the World," World Bank Economic Review, World Bank Group, vol. 22(3), pages 397-430, November.
    6. Jiandong Chen & Dai Dai & Ming Pu & Wenxuan Hou & Qiaobin Feng, 2010. "The trend of the Gini coefficient of China," Brooks World Poverty Institute Working Paper Series 10910, BWPI, The University of Manchester.
    7. van Ruijven, Bas J. & van Vuuren, Detlef P. & de Vries, Bert J.M. & Isaac, Morna & van der Sluijs, Jeroen P. & Lucas, Paul L. & Balachandra, P., 2011. "Model projections for household energy use in India," Energy Policy, Elsevier, vol. 39(12), pages 7747-7761.
    8. Lombardo Vincenzo, 2011. "Growth and Inequality Effects on Poverty Reduction in Italy," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 241-280.
    9. Easterly, William, 2009. "How the Millennium Development Goals are Unfair to Africa," World Development, Elsevier, vol. 37(1), pages 26-35, January.
    10. Martin Ravallion, 2012. "Why Don't We See Poverty Convergence?," American Economic Review, American Economic Association, vol. 102(1), pages 504-523, February.
    11. Iniguez-Montiel, Alberto Javier, 2014. "Growth with Equity for the Development of Mexico: Poverty, Inequality, and Economic Growth (1992–2008)," World Development, Elsevier, vol. 59(C), pages 313-326.
    12. Jaya Krishnakumar & Cristian Ugarte, 2011. "The effect of growth on poverty reduction," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 11061, Institut d'Economie et Econométrie, Université de Genève.
    13. Kutzbach, Mark J., 2009. "Motorization in developing countries: Causes, consequences, and effectiveness of policy options," Journal of Urban Economics, Elsevier, vol. 65(2), pages 154-166, March.
    14. Lopez , J. Humberto & Perry, Guillermo, 2008. "Inequality in Latin America : determinants and consequences," Policy Research Working Paper Series 4504, The World Bank.
    15. Laurence Roope & Miguel Niño-Zarazúa & Finn Tarp, 2018. "How polarized is the global income distribution?," WIDER Working Paper Series 003, World Institute for Development Economic Research (UNU-WIDER).
    16. Klinger, Bailey & Lederman, Daniel, 2006. "Innovation and export portfolios," Policy Research Working Paper Series 3983, The World Bank.
    17. Narasimha Rao, 2014. "International and intranational equity in sharing climate change mitigation burdens," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 14(2), pages 129-146, May.
    18. Valpy FitzGerald, 2008. "Economic development and fluctuations in earnings inequality in the very long run: The evidence from Latin America 1900-2000," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(8), pages 1028-1048.
    19. repec:unu:wpaper:wp2012-44 is not listed on IDEAS
    20. Lopez, Humberto, 2006. "Did growth become less pro-poor in the 1990s ?," Policy Research Working Paper Series 3931, The World Bank.

    More about this item


    Achieving Shared Growth; Inequality; Economic Conditions and Volatility; Services&Transfers to Poor; Poverty Impact Evaluation;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:wbk:wbrwps:3814. 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: (Roula I. Yazigi). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

    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.