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The Median is the Message: A Good Enough Measure of Material Wellbeing and Shared Development Progress
Author(s) -
Birdsall Nancy,
Meyer Christian J.
Publication year - 2015
Publication title -
global policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.602
H-Index - 33
eISSN - 1758-5899
pISSN - 1758-5880
DOI - 10.1111/1758-5899.12239
Subject(s) - per capita , consumption (sociology) , economics , inequality , consumer expenditure survey , per capita income , demographic economics , measure (data warehouse) , econometrics , permanent income hypothesis , public economics , macroeconomics , aggregate expenditure , demography , mathematics , population , computer science , environmental health , medicine , mathematical analysis , social science , database , sociology , market liquidity
Abstract We argue that survey‐based median household consumption expenditure (or income) per capita be incorporated into standard development indicators, as a simple, robust and durable indicator of typical individual material wellbeing in a country. Using household survey data available for low and middle‐income countries from the World Bank's PovcalNet tool, we show that as a measure of income‐related wellbeing, it is far superior to the commonly used GDP per capita as well as survey‐based measures at the mean. We also argue that survey‐based median measures are ‘distribution‐aware’, i.e. when used as the denominator of various widely available indicators such as mean consumption expenditure per capita they provide a ‘good enough’ indicator of consumption (or income) inequality. Finally, as a post‐2015 indicator of progress at the country‐level in promoting shared development and reducing inequality, we propose that the rate of increase in median consumption per capita after taxes and transfers exceeds the rate of increase in average consumption in the same period.