PrefBlog

There has been a lot of yammering about income inequality in the past few years, as I mentioned on March 15. I’ve found some more source data:

In the next calculation, the world Gini index is recalculated by weighting countries by their population size. This means that countries with large populations have a larger impact on the Gini index than do countries with smaller populations. The population-weighted Gini index was calculated by Branko Milanovic and published in his book Worlds Apart: Measuring International and Global Inequality.13 The chart below compares the population-weighted Gini index (red line) with the unweighted Gini index shown in the previous chart (black line).

This weighted world Gini index declines almost consistently from 1962 onward. This is mainly due to the phenomenal economic growth in China and India relative to richer countries. Because China and India together account for over one-third of the world’s population, these two countries have a very strong impact on the population-weighted Gini results. But if China and India are removed from the calculation, the population-weighted Gini index trends upward after 1982 (as does the unweighted Gini index), meaning that overall income inequality is increasing in the rest of the world.

There’s a great graph, but it’s Flash (Wow! Way cool!), so go look for yourself. I like the last sentence from the quoted verbiage – ‘if we remove enough data, we can prove our point!’

It was a mixed day for the Canadian preferred share market, with PerpetualPremiums up 15bp, FixedResets down 9bp and DeemedRetractibles gaining 8bp. Volatility was average. Volume was low.

This entry was posted on Friday, April 12th, 2013 at 2:34 am and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.