Data Help Desk

Development Data Group

The World Bank

Postal Address:Mailstop MSN MC2-209, 1818 H Street, NW, Washington, DC 20433 USA

Telephone:+1 202 473 7824

Fax:+1 202 522 3669

E-mail: data@worldbank.org

Website:http://iresearch.worldbank.org/PovcalNet/, http://www.worldbank.org/data

The poorest quintiles’ percentage share of national income or consumption is the share that accrues to the bottom fifth (quintile) of the population.

Inequality in the distribution of income is reflected in the percentage shares of income or consumption accruing to portions of the population ranked by income or consumption levels.

Data on the distribution of income or consumption come from nationally representative household surveys. Where the original data from the household survey are available, they can be used to directly calculate the income or consumption shares by quintile. Otherwise, shares have been estimated from the best available grouped data. Consumption, including consumption from own production, or income is calculated for the entire household, adjusted for household size, and then divided by the number of persons living in the household to derive a per capita measure. The population is then ranked by consumption or income; and then the bottom fifth of the population’s consumption or income is expressed as a percentage of aggregate household income. The calculations are made in local currency, without adjustment for price changes or exchange rates or for spatial differences in the cost of living within countries are not made, because the data needed for such calculations are generally unavailable.

Income distribution for high-income countries are calculated directly from the Luxembourg Income Study database, using an estimation method consistent with that applied for developing countries.

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. 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 differ more often 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 has made an effort to ensure that the data are as comparable as possible. Wherever possible, consumption has been used rather than income.

National figures might differ from the global estimates due to differences in computation method (adjusted vs. unadjusted for household size, income distribution used instead of consumption etc.) and the input surveys used.

The World Bank Development Research Group produces the indicator using nationally representative household surveys that are conducted by national statistical offices or by private agencies under the supervision of government or international agencies and obtained from government statistical offices and World Bank Group country departments. For most countries the income distribution indicators are based on the same data used to derive the $1.25 a day poverty estimates. The Luxemburg Income Study provides data for high-income countries. The World Bank is developing a time series database of distributional information. At present, only data for the most recent year and for surveys determined to be nationally representative are reported in the World Bank database.

To allow comparability across countries, measures are estimated from the primary data source (tabulations or household level data) using a consistent method of estimation rather than relying on existing estimates. The estimation from tabulations requires an interpolation method. Parameterized Lorenz curves with flexible functional forms are mainly used.

In principle, there is no adjustment for missing data, as the indicator is calculated only in year for which a suitable survey data of group data are available.

Data are available for 130 countries.

Estimates are available only at the national level. In order to calculate distribution of income or consumption for a region (or income group), data collected through uniform surveys across all countries in the region (or income group) are needed. However, such data are not available at the moment. Methods for generating regional and global estimates are in development.

The lag between the reference year and actual production of data series depends on the availability and reliability of the household survey for each country. In developing countries they typically take place every three to five years. This series is updated semi-annually in April and September each year, but the availability of new estimates for countries depends on the availability of new suitable household surveys.

Regional and global estimates are not available at the moment. Methods for generating regional and global estimates are in development.

The World Development Indicators (WDI) Online database, which contains this series, is updated semi-annually in April and September each year, but the availability of new estimates for countries depends on the availability of new suitable household surveys.