A Note on the Simple Algebra of the Shared Prosperity Indicator

17 Pages Posted: 20 Apr 2016

Date Written: October 1, 2013

Abstract

One of the two goals of the World Bank Group's new strategy is to promote shared prosperity, defined as the income growth of the bottom 40 percent of the population. The simple monitoring indicator then is the income per capita of the bottom 40 percent of the population. The growth of this indicator can be decomposed into two components: the change in the share of total income accruing to the bottom 40 percent and the growth of the average income of the total population. This paper presents: (i) a brief discussion of the properties of the indicator; (ii) the simple decomposition in algebraic form; (iii) a graphical method for displaying the combinations of the two components of the decomposition; (iv) simulations of the decomposition for hypothetical countries; and (v) some illustrative data.

Keywords: Inequality, Achieving Shared Growth, Economic Theory & Research, Emerging Markets, Services & Transfers to Poor

Suggested Citation

Rosenblatt, David and McGavock, Tamara, A Note on the Simple Algebra of the Shared Prosperity Indicator (October 1, 2013). World Bank Policy Research Working Paper No. 6645, Available at SSRN: https://ssrn.com/abstract=2337798

David Rosenblatt

World Bank ( email )

1818 H Street, N.W.
MSN MC4-404
Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org/en/about/people/david-rosenblatt

Tamara McGavock

Cornell University ( email )

Ithaca, NY 14853
United States

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