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A note on the simple algebra of the shared prosperity indicator, Volume 1
 
Author:Rosenblatt, David; McGavock, Tamara J.; Country:World;
Date Stored:2013/10/08Document Date:2013/10/01
Document Type:Policy Research Working PaperSubTopics:Achieving Shared Growth; Economic Theory & Research; Emerging Markets; Inequality; Services & Transfers to Poor
Language:EnglishRegion:The World Region
Report Number:WPS6645Collection Title:Policy Research working paper ; no. WPS 6645
Volume No:1  

Summary: 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.

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