{"title":"Global Income Inequality and Cost-of-Living Adjustment: The Geary-Allen World Accounts","authors":"Ingvild Almås, Erik Ø. Sørensen","doi":"10.2139/ssrn.2169891","DOIUrl":null,"url":null,"abstract":"Standard ways of measuring real income are known to be inconsistent with consumer preferences. We provide preference-consistent estimates of real income, based on the income-specific price indices that are consistent with nonhomothetic preferences. We find that existing measures, such as Geary, GEKS and GAIA, create systematic biases: the poorer is a country, the more its income is overestimated by these measures. Consequently, international income inequality is underestimated by the same measures.","PeriodicalId":133518,"journal":{"name":"Norwegian School of Economics","volume":"58 3 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2012-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"23","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Norwegian School of Economics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.2169891","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 23
Abstract
Standard ways of measuring real income are known to be inconsistent with consumer preferences. We provide preference-consistent estimates of real income, based on the income-specific price indices that are consistent with nonhomothetic preferences. We find that existing measures, such as Geary, GEKS and GAIA, create systematic biases: the poorer is a country, the more its income is overestimated by these measures. Consequently, international income inequality is underestimated by the same measures.
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