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The Review of Economics and Statistics Vol. 94 No. 1 2012

Global Income Distributions and Inequality, 1993 and 2000: Incorporating Country-Level Inequality Modeled with Beta Distributions

Duangkamon Chotikapanich1,2; William E. Griffiths3; D. S. Prasada Rao; Vicar Valencia4

1 Australian Regenerative Medicine Institute · 2 Monash University · 3 The University of Melbourne · 4 Rochester Institute of Technology

Abstract

Using a method-of-moments estimator, flexible three-parameter beta distributions are fitted to aggregate country-level income data to overcome an untenable assumption of previous studies that persons within each income group receive the same income. Regional and global income distributions are derived as weighted mixtures of country-specific distributions. Analytical expressions for Gini and Theil's measures of inequality at country, regional, and global levels are derived in terms of the parameters of the beta distributions. Application to data for 91 countries in 1993 and 2000 reveals a high degree of global inequality, with evidence of declining inequality, largely attributable to growth in China.

DOI
10.1162/rest_a_00145
Volume
94
Issue
1
Pages
52-73
Language
en
Sources
crossref openalex

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