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  • Reply to: Poverty reduction, growth, and movements in income distribution   11 hours 11 min ago

    Thanks Jos. As discussed over email, after seeing your data I now suspect that the reason we arrive at different estimates of the statistical mode (the peak of the distribution graph) is that we use different methods for approximating the shape of the income distribution.

    The estimates I provided in my earlier comment are drawn directly from Povcalnet, where the shape of the distribution is based on the best fit between a General Quadratic and Beta lorenz curve. I would favor my $1.22 estimate of the mode since it is faithful to (and therefore consistent with) the Bank's method for compiling global poverty estimates. But no approximation of the shape of the distribution can be definitively correct as all approximations are…approximations.

    Thanks again for an interesting post.

  • Reply to: Ending Extreme Poverty In Our Generation   1 day 4 hours ago

    Global need for sustained development can be more effective when attention is given to the right channels. Agriculture,skill and mental development can reduce poverty in Africa as i see it.

  • Reply to: Poverty reduction, growth, and movements in income distribution   1 day 4 hours ago

    Thanks for your comment. It is quite interesting and to some extent worrying that you get different results from the same dataset i.e. Log linear or normal linear, the peak remains at 1.64-65 a day in our distribution function for 2010. I will send you by email the excel file with our numbers so you can compare them with yours. Figure 1a might not completely show the tails well at the upper end (and lower end) of Pen’s parade and hence you should not jump to conclusions. Anyway, have a look at the excel file I am sending you and let’s get together and exchange notes, ideas and future work?

  • Reply to: Why don't poor countries do R&D?   1 day 4 hours ago

    Great paper. This is issue of lack of complementary factors is actually critical for innovation, especially in LDCs. A mirror paradox occurs with innovation rates, which are very large, especially in Sub-Saharan Africa, compared to OECD countries, and do not translate into productivity gains. Again reflecting small innovations far from the technological frontier that lack the complementary factors needed to become substantial changes to the production process or firm organization. We defenetely need further understanding of the nature of innovation in developing countries, so this paper is a great contribution.

  • Reply to: Poverty reduction, growth, and movements in income distribution   1 day 6 hours ago

    I agree these two charts are really useful for understanding changes in global poverty over the last 20 years, and the relationship between growth, distribution and poverty.

    However, I have some misgivings with both.

    According to the first chart, the richest 1% of the developing world has a daily per capita income of less than $10. So much for the emergence of a global middle class! Based on data from Povcalnet, the richest 6 centiles (6%) should appear above the $10 mark in 1990, and by 2010 the richest 11 centiles (11%) should be above this threshold. So there must be an error somewhere in the calculations behind this chart, or at least in the labeling of the y-axis.

    On the second chart, my concern is not strictly with the chart but the way it has been interpreted. You note that the largest number of people making the same income (illustrated by the peak of the distribution graph) is around $1.65 in 2010. But this is not strictly correct. Again, using data from Povcalnet, it can be shown that around 15 million people are estimated to live on $1.65 to the nearest cent. However, a much larger 18 million people live on $1.22, the true statistical mode. You'll notice that this is, curiously enough, almost exactly equal to the international poverty line of $1.25. My colleagues and I made this point in our 2013 paper, The Final Countdown:

    The explanation here is that the x-axis uses a logarithmic scale. It is accurate to say that the peak of the density function occurs at around the natural log of $1.65. But this is not the same as saying that the largest number of people making the same income falls at $1.65, which wrongly interprets the log scale as a linear scale.

    Despite these misgivings, I agree wholeheartedly with the conclusions you draw from the two charts and look forward to more analysis on the Bank's twin goals.