Inequality in the distribution of income is reflected in the percentage shares of income or consumption accruing to segments of the population ranked by income or consumption levels. The segments ranked lowest by personal income receive the smallest shares of total income. The Gini index provides a convenient summary measure of the degree of inequality.

    Data on personal or household income or consumption come from nationally representative household surveys. The data in the table refer to different years between 1983–85 and 2003. Footnotes to the survey year indicate whether the rankings are based on per capita income or consumption. Each distribution is based on percentiles of population—rather than of households—with households ranked by income or expenditure per person.
    Where the original data from the household survey were available, they have been used to directly calculate the income (or consumption) shares by quintile. Otherwise shares have been estimated from the best available grouped data.

    The distribution data have been adjusted for household size, providing a more consistent measure of per capita income or consumption. No adjustment has been made for spatial differences in cost of living within countries, because the data needed for such calculations are generally unavailable. For further details on the estimation method for low- and middle-income economies, see Ravallion and Chen (1996).

    Because the underlying household surveys differ in method and type of data collected, the distribution data are not strictly comparable across countries. These problems are diminishing as survey methods improve and become more standardized, but achieving strict comparability is still impossible (see About the data for table 2.5).

    Two sources of noncomparability should be noted in particular. First, the surveys can differ in many respects, including whether they use income or consumption expenditure as the living standard indicator. The distribution of income is typically more unequal than the distribution of consumption. In addition, the definitions of income used usually differ among surveys. Consumption is usually a much better welfare indicator, particularly in developing countries. Second, households differ in size (number of members) and in the extent of income sharing among members. And individuals differ in age and consumption needs. Differences among countries in these respects may bias comparisons of distribution.

    World Bank staff have made an effort to ensure that the data are as comparable as possible. Wherever possible, consumption has been used rather than income. Income distribution and Gini indexes for high-income countries are calculated directly from the Luxembourg Income Study database, using an estimation method consistent with that applied for developing countries.

• Survey year is the year in which the underlying data were collected. • Gini index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Thus a Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. • Percentage share of income or consumption is the share that accrues to subgroups of population indicated by deciles or quintiles. Percentage shares by quintile may not sum to 100 because of rounding.  

The data on distribution are compiled by the World Bank’s Development Research Group using primary household survey data obtained from government statistical agencies and World Bank country departments. The data for high-income economies are from the Luxembourg Income Study database.