The Evolution of Global Inequality: Absolute, Relative and Intermediate Views

19 Pages Posted: 12 Apr 2011

See all articles by Kristof Bosmans

Kristof Bosmans

Maastricht University

Koen Decancq

University of Antwerp; KU Leuven - Center for Economic Studies; Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE); University of Mannheim - Mannheim Centre for European Social Research (MZES)

André Decoster

Department of Economics KU Leuven

Date Written: March 30, 2011

Abstract

We compare absolute, relative and intermediate views on the evolution of global inequality between 1980 and 2009. According to the relative view, inequality remains invariant after a uniform proportional change of all incomes whereas the absolute view requires invariance to a uniform change of all incomes with the same amount. We use a generic intermediate view which states that an income distribution is as unequal as another one if it can be obtained as a weighted average of a uniform proportional and a uniform absolute change of the incomes. Using recent data on GDP per capita for 115 countries, we find considerable support for the claim that world inequality increased for the absolute view and for intermediate views which move substantially in the direction of the relative view.

Keywords: global inequality, intermediate inequality, Lorenz dominance

JEL Classification: D31, D63, I31, O5

Suggested Citation

Bosmans, Kristof and Decancq, Koen and Decoster, André, The Evolution of Global Inequality: Absolute, Relative and Intermediate Views (March 30, 2011). Available at SSRN: https://ssrn.com/abstract=1806875 or http://dx.doi.org/10.2139/ssrn.1806875

Kristof Bosmans (Contact Author)

Maastricht University ( email )

Tongersestraat 53
Maastricht, Limburg 6211 LM
Netherlands

Koen Decancq

University of Antwerp ( email )

Prinsstraat 13
Antwerp, Antwerp 2000
Belgium

KU Leuven - Center for Economic Studies ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

University of Mannheim - Mannheim Centre for European Social Research (MZES) ( email )

D-68131 Mannheim
Germany

André Decoster

Department of Economics KU Leuven ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

HOME PAGE: http://www.andredecoster.be

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