A Note on the Simple Algebra of the Shared Prosperity Indicator

One of the two goals of the World Bank Group's new strategy is to promote shared prosperity, defined as the income growth of the bottom 40 percent of the population. The simple monitoring indicator then is the income per capita of the bottom 40 percent of the population. The growth of this indicator can be decomposed into two components: the change in the share of total income accruing to the bottom 40 percent and the growth of the average income of the total population. This paper presents: (i) a brief discussion of the properties of the indicator; (ii) the simple decomposition in algebraic form; (iii) a graphical method for displaying the combinations of the two components of the decomposition; (iv) simulations of the decomposition for hypothetical countries; and (v) some illustrative data.

Bibliographic Details

Main Authors:	McGavock, Tamara J., Rosenblatt, David
Language:	English en_US
Published:	World Bank, Washington, DC 2013-10
Subjects:	ANNUAL GROWTH, AVERAGE INCOME, AVERAGE INCOMES, COUNTRY DATA, COUNTRY EXPERIENCES, CROSS-COUNTRY DIFFERENCES, DEMOCRACY, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT ECONOMICS, DEVELOPMENT INDICATORS, DEVELOPMENT POLICY, DEVELOPMENT RESEARCH, DIFFERENCES IN INCOME, DISTRIBUTION OF INCOME, ECONOMIC GROWTH, ECONOMIC INEQUALITY, ECONOMIC POLICY, EMERGING MARKET, EMERGING MARKET ECONOMIES, EMPIRICAL EVIDENCE, EXTREME POVERTY, GDP, GDP PER CAPITA, GINI COEFFICIENT, GROWTH MODEL, GROWTH RATE, GROWTH RATES, HOUSEHOLD INCOME, HOUSEHOLD SURVEYS, HUMAN DEVELOPMENT, INCOME, INCOME DISTRIBUTION, INCOME GROWTH, INCOME LEVEL, INCOME LEVELS, INCOME SHARE, INCOMES, INEQUALITY, INEQUALITY AVERSION, INEQUALITY MEASURE, INEQUALITY MEASURES, JOB CREATION, LIVING STANDARDS, LOCAL CURRENCY, LONG-RUN GROWTH, LORENZ CURVE, NATURAL RESOURCE, NEGATIVE RELATIONSHIP, NEGATIVE VALUE, OLD ISSUES, PER CAPITA GROWTH, PER CAPITA INCOME, POLICY DISCUSSIONS, POLICY IMPLICATIONS, POLICY RESEARCH, POOR, POOR COUNTRIES, POOR COUNTRY, POOR PEOPLE, POPULATION GROWTH, POPULATION SHARE, POVERTY LEVELS, POVERTY LINE, POVERTY LINES, POVERTY MEASURE, POVERTY RATE, POWER PARITY, PURCHASING POWER, PURE GROWTH, REDUCING INEQUALITY, REDUCING POVERTY, RELATIVE INEQUALITY, RELATIVE ROLE, RICH COUNTRIES, SIGNIFICANT EFFECT, SOCIAL PROGRAMS, WORLD DEVELOPMENT INDICATORS,
Online Access:	http://documents.worldbank.org/curated/en/2013/10/18365080/note-simple-algebra-shared-prosperity-indicator https://hdl.handle.net/10986/16860
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