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Perspectives on the World Income Distribution: Beyond Twin Peaks Towards Welfare Conclusions

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  • Weisbrod, Julian
  • Vollmer, Sebastian
  • Holzmann, Hajo

Abstract

This paper contributes towards the growing debate concerning the world distribution of income and its evolution over that past three to four decades. Our methodological approach is twofold. First, we formally test for the number of modes in a cross-sectional analysis where each country is represented by one observation. We contribute to existing studies with technical improvements of the testing procedure, enabling us to draw new conclusions, and an extension of the time horizon being analyzed. Second, we estimate a global distribution of income from national log-normal distributions of income, as well as a global distribution of log-income as a mixture of national normal distributions of log-income. From this distribution we obtain measures for global inequality and poverty as well as global growth incidence curves.

Suggested Citation

  • Weisbrod, Julian & Vollmer, Sebastian & Holzmann, Hajo, 2007. "Perspectives on the World Income Distribution: Beyond Twin Peaks Towards Welfare Conclusions," Proceedings of the German Development Economics Conference, Göttingen 2007 32, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec07:6555
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    References listed on IDEAS

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    1. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-1055, July.
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    6. Danny Quah, 2002. "One Third of the World's Growth and Inequality," WIDER Working Paper Series DP2002-38, World Institute for Development Economic Research (UNU-WIDER).
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    14. Charles I. Jones, 1997. "On the Evolution of the World Income Distribution," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 19-36, Summer.
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    Cited by:

    1. Dai, J. & Sperlich, S., 2010. "Simple and effective boundary correction for kernel densities and regression with an application to the world income and Engel curve estimation," Computational Statistics & Data Analysis, Elsevier, vol. 54(11), pages 2487-2497, November.
    2. Lahoti Rahul & Jayadev Arjun & Reddy Sanjay, 2016. "The Global Consumption and Income Project (GCIP): An Overview," Journal of Globalization and Development, De Gruyter, vol. 7(1), pages 61-108, June.

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    More about this item

    Keywords

    Convergence; Silverman's test; non-parametric statistics; bimodal; global income distribution; poverty; inequality; growth incidence curves;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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