Global and Regional Economic Inequality: Methods of Measurement and Evidences

Global economic inequality has attracted the attention of researchers and policy makers for several years. Globalization has raised questions about its impact on global inequality and poverty. However, the recent answers to such questions are ambiguous. According to some researchers, global inequality increases. Other economists hold that inequality decreases. One can also find the opinion that global inequality dose not exhibit any visible increasing or decreasing trend. One may ask the question what the reason of such variety of opinions about global inequality is. 
The lack of countries’ statistical income data, comparable across countries and years, seems to be the main reason of controversial conjectures concerning global inequality and its evolution over time.  Global samples of individual income data on a worldwide scale would be ideal for this purpose. However, such micro-data are currently available only for a limited number of countries and years. In the databases, which purport to collect income data on a worldwide scale, only some summary statistics (quantile income shares, means, Gini indices) are presented. However, countries’ Gini indices cannot be used for the evaluation of global inequality since this measure of inequality is not decomposable. Therefore, the development of efficient methods of extracting micro-data from available secondary statistics now seems to be the only way of overcoming the scarcity of national household surveys’ samples. The recent ‘ungrouping methods’ have several shortcomings, among them unknown statistical reliability and the limited coverage of countries are the most serious.
In this monograph, a new method of retrieving the global sample of incomes is proposed. This method, based on the Sequential Probability Ratio Test, generates random samples, which reconstruct unavailable national samples with predetermined statistical reliability and numerical precision. The application of this method brings empirical evidences which contradict the widespread opinion about rising global inequality in two recent decades.