A normal relationship ? Poverty, growth, and inequality

By Humberto López, L. Serven. 2006

188 citations recorded by the source corpus.

Using a large cross-country income distribution dataset spanning close to 800 country-year observations from industrial and developing countries, the authors show that the size distribution of per capita income is well approximated empirically by a lognormal density. The null hypothesis that per capita income follows a lognormal distribution cannot be rejected-although the same hypothesis is unambiguously rejected when applied to per capita consumption. The authors show that lognormality of per capita income has important implications for the relative roles of income growth and inequality changes in poverty reduction. When poverty reduction is the overriding policy objective, poorer and relatively equal countries may be willing to tolerate modest increases in income inequality in exchange for faster growth-more so than richer and highly unequal countries.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/6765e1ed5c25523d299a72b58bdaa9f569614499

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Citations in the corpus

What is the Impact of International Remittances on Poverty and Inequality in Latin America (2007, background): “…impact of remittances on growth and inequality reviewed above and of estimates for γ and φ in equation (5) derived under log-normality and taken from Lopez and Serven (2006).18 TABLE 3 HERE Evidence in Table 3 indicates that there is substantial heterogeneity of results depending upon the…”
Finance, inequality and the poor (2007, methodology): “For a lognormal distribution of income, Lopez and Serven (2006) compute the growth and distribution elasticities for different values of the Gini coefficient and the ratio of the poverty-line to mean income.”
Fiscal Redistribution and Income Inequality in Latin America (2008, background): “Indeed, the median country in the region collects 4 percentage points of GDP less than would be expected given its level of development.22 θ 19 Lopez and Serven (2006c) calibrate a simple fiscal model for Europe and conclude that to reduce the Gini coefficient of market incomes by 1 percentage…”
Model projections for household energy use in India (2011, methodology): “…35 for urban areas, indicating a relatively equal income distribution.4 We disaggregate the average household expenditure levels to population quintiles using the GINI-coefficient (see Electronic Annex in the online version of this article and Humberto Lopez and Servén, 2006; Rutherford, 1955).”
Banking Services for Everyone? Barriers to Bank Access and Use around the World (2006, background): “Specifically, 54% of the population in Cameroon, 81% in Kenya, 40% in Madagascar, 94% in Malawi, 89% in Sierra 12 Calculations are based on Dollar and Kraay (2002) and Lopez and Serven (2006).”