Has the World Converged? A Robust Analysis of Non-Monetary Bounded Indicators

39 Pages Posted: 17 May 2016

See all articles by Suman Seth

Suman Seth

University of Leeds - Economics Division; University of Oxford - Oxford Poverty & Human Development Initiative

Gaston Yalonetzky

University of Leeds - Leeds University Business School (LUBS); Leeds University Business School (LUBS) - Division of Economics

Date Written: March 1, 2016

Abstract

Most non-monetary development indicators are bounded and many of them are presented in terms of either attainments or shortfalls. Whether an absolute approach or a relative approach should be undertaken to assess cross-country convergence of these indicators has been a subject of debate. Revisiting this debate, we provide three arguments explaining why a relative approach is misleading and, instead, an absolute approach is more appropriate. We assess the presence of absolute convergence across countries in several non-monetary development indicators by applying a number of absolute inequality indices. Although we find numerous instances of absolute convergence, these are rarely robust to alternative specifications of indices. We additionally contribute to the available methodological toolkit of convergence analysis by employing absolute-Lorenz curves to assess the robustness of absolute cross-country convergence, which is rarely conducted in the literature, and never to date with absolute-Lorenz curves. We also clarify the relationship between different relevant notions of egalitarian progress and elucidate how progress in these indicators relates to changes in their convergence using absolute Lorenz curves.

Suggested Citation

Seth, Suman and Yalonetzky, Gaston, Has the World Converged? A Robust Analysis of Non-Monetary Bounded Indicators (March 1, 2016). ECINEQ Working Paper 398, Leeds University Business School Working Paper No. 17-04, Available at SSRN: https://ssrn.com/abstract=2780033 or http://dx.doi.org/10.2139/ssrn.2780033

Suman Seth (Contact Author)

University of Leeds - Economics Division ( email )

Leeds LS2 9JT
United Kingdom
+44(0)1133432629 (Phone)

HOME PAGE: http://business.leeds.ac.uk/about-us/our-people/staff-directory/profile/suman-seth/

University of Oxford - Oxford Poverty & Human Development Initiative

3 Mansfield Road
Queen Elizabeth House
Oxford, Oxfordshire OX1 3TB
United Kingdom
+44 1865 618643 (Phone)

HOME PAGE: http://ophi.org.uk/about/people/research-associates-and-advisors/suman-seth/

Gaston Yalonetzky

University of Leeds - Leeds University Business School (LUBS) ( email )

Leeds LS2 9JT
United Kingdom

Leeds University Business School (LUBS) - Division of Economics ( email )

Leeds LS2 9JT
United Kingdom

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