On Analysing the World Distribution of Income

52 Pages Posted: 13 Mar 2009

See all articles by Anthony B. Atkinson

Anthony B. Atkinson

University of Oxford - Nuffield College of Medicine; CESifo (Center for Economic Studies and Ifo Institute)

Andrea Brandolini

Bank of Italy

Date Written: January 16, 2009

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.

Keywords: global income inequality, absolute vs. relative inequality, poverty, world citizens

JEL Classification: D31, C80

Suggested Citation

Atkinson, Anthony B. and Brandolini, Andrea, On Analysing the World Distribution of Income (January 16, 2009). Bank of Italy Temi di Discussione (Working Paper) No. 701. Available at SSRN: https://ssrn.com/abstract=1357268 or http://dx.doi.org/10.2139/ssrn.1357268

Anthony B. Atkinson

University of Oxford - Nuffield College of Medicine

CESifo (Center for Economic Studies and Ifo Institute)

Andrea Brandolini (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Roma, Rome 00184
Italy
+390647923568 (Phone)
+390647923720 (Fax)

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