Mean Incomes and Economic Welfare, 2015

Mean Incomes and Economic Welfare are Strongly Associated in a Cross-Section of Countries

Source: Hellebrandt and Mauro (2016) and IMF staff calculations.
Note: Mean incomes are drawn from household surveys sampling thousands of individuals for each country. Atkinson’s measure of economic welfare (“equally-distributed-equivalent income”) is the income that, if equally distributed, would be viewed by an external observer as providing the same societal welfare as the existing income distribution. Estimations are performed using various inequality aversion parameters (ε=0.2; 0.5; 1.5; and 2.0). The data are reported in logarithms of 2011 U.S. international dollars (i.e., at purchasing power parity). Countries further below the dashed 45° line are those with greater inequality.