Wednesday, February 2, 2011

Comparatively Rich?

This past weekend, The New York Times reviewed a book titled The Haves and the Have Nots: A Brief and Idiosyncratic History of Global Inequality.The book is about income distribution and while it may sound like the same old argument about the inequality of it all, it is more. The book is built around three academic essays; but each is followed by a number of short pieces to add flavor and color to the discussion.  

What is particularly interesting to me is the information that seems to be in the second and third essays - those that focus on global inequality. There are bits of information in there that can be used with students when discussion income inequality and economic development that might bring clarity to their thought.  Specifically, it will help them understand that the idea of wealth can be somewhat subjective.

This blog post from The New York Times (HT to Marginal Revolution) was a follow-up to the review. The author points out an interesting chart that shows that the average real income of the bottom five percent in the U.S. is higher than the average real income of the top five percent in India.

Having said that, I suspect the spread in India's top five is significantly larger than the spread in the bottom five in the U.S. That alone should help students become more skeptical about how "averages" are used. But the relative wealth of the "poor" in the U.S. is something that we often forget. That does not excuse the gap, but it does put it into a different perspective. I hope to read this book soon, and I'm placing it on my carousel at left. I hope some of you are also moved to read it, and come back and comment.

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