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# World Income Inequality chart

Following on from Geoff and Ben’s postings – here is a very worthwhile chart that looks at World Income Inequality. It is from the publication entitled “The Haves and the Have-Nots,” a new book by the World Bank economist Branko Milanovic about inequality around the world which was recently reviewed by New York Times columnist Catherine Rampbell.

The graph below shows how inequality in Brazil, USA, China, and India ranks on a global scale. On the x axis the population of each country is divided into 20 equally-sized income groups, which is ranked by each country’s household income per person. These are referred to as ventiles and 1 ventile = 5% of the population. So that we are looking at purchasing power parity (PPP) the data is adjusted for the variance in the cost of living in different countries.

Now on the vertical axis, you can see where any given ventile from any country falls when compared to the entire population of the world.

Brazil
- poorest 5% are amongst the poorest in the world
- richest 5% are amongst the richest in the world

USA
- the bottom 5% are richer than 68% of the world’s population

India
- the bottom 5% = 4th poorest percentile worlwide.
- the richest 5% = 68th percentile worldwide which means that USA’s poorest = India’s richest.

Now you might be wondering: How can there be so many people in the world who make less than America’s poorest, many of whom make nothing each year? Remember that were looking at the entire bottom chunk of Americans, some of whom make as much as \$6,700; that may be extremely poor by American standards, but that amounts to a relatively good standard of living in India, where about a quarter of the population lives on \$1 a day.

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