Sample Chapter for Milanovic, B.: Worlds Apart: Measuring International and Global Inequality.

Sample Chapter for Milanovic, B.: Worlds Apart: Measuring International and Global Inequality.: "THE THREE CONCEPTS OF INEQUALITY DEFINED

THERE are three concepts of world inequality that need to be sharply distinguished. Yet, they are often confounded; even the terminology is unclear. So, we shall now first define them and give them their proper names.

The first (Concept 1) is unweighted international inequality. This concept takes country as the unit of observation, uses its income (or GDP) per capita, disregards its population, and thus compares, as it were, representative individuals from all the countries in the world. It is a kind of UN General Assembly where each country, small or large, counts the same. Imagine a world populated with ambassadors from some 200 countries, each of whom carries a sign on which is written the GDP per capita of his/her country. These ambassadors are then ranked from the poorest to the richest, and a measure of inequality is calculated across such ranking of nations (ambassadors). Note that this is properly a measure of international inequality, since it is compares countries. It is 'unweighted' because each country counts the same. Concept 1 is not a measure of inequality among citizens of the world./.../"