Picture of the Day: Country and World Inequality

Branko Milanovic, “The Haves and the Have-Nots,” p. 116.

Catherine Rampell in the New York Times' Economix blog has a nice discussion of this graph. Students of development will find it unsurprising but it is a nice way to understand both domestic inequality and world inequality. The horizontal axis is the income 'ventile' Poorest 5%, next poorest 5%, and so on. The vertical axis is the share of world income. So the poorest 5% of Americans are about as rich as the richest 5% in India. While the richest 5% in Brazil are about as rich as the richest 5% in the US.  Note also how unequal Brazil is overall the poorest are among the poorest in the world while the richest are among the richest.  I don't know how world income is normalized but purchasing power parity is the way you should do it.

Anyway, Rampell has a more thorough explanation.