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Global inequality recalculated and updated: the effect of new PPP estimates on global inequality and 2005 estimates

Abstract

The results of new direct price level comparisons across 146 countries in 2005 have led to large revisions of PPP (purchasing power parity) exchanges rates, particularly for China and India. The recalculations of international and global inequalities, using the new PPPs, show that inequalities are substantially higher than previously thought. Inequality between global citizens is estimated at 70 Gini points rather than 65 as before. This high level of inequality is confirmed by the results obtained from the new set of 122 national household surveys from around year 2005.

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Correspondence to Branko Milanovic.

Additional information

I am grateful for comments to Yuri Dikhonov, Peter Lanjouw, Thomas Pogge, editor of this Journal Jean-Yves Duclos and two anonymous referees. The views expressed are those of the author and should not be attributed to the World Bank or its affiliated organizations.

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Milanovic, B. Global inequality recalculated and updated: the effect of new PPP estimates on global inequality and 2005 estimates. J Econ Inequal 10, 1–18 (2012). https://doi.org/10.1007/s10888-010-9155-y

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Keywords

  • Global inequality
  • International inequality
  • Purchasing power parity

JEL Classification

  • D31
  • I3
  • 057