Abstract
Current global inequality measures assume that national-mean income does not matter to economic welfare at given household income as measured in surveys. The paper questions that assumption on theoretical and empirical grounds and finds that prominent stylized facts about global inequality are not robust. At one extreme, theories of relative deprivation yield nationalistic measures whereby global inequality is average within-country inequality, which is rising. However, other theories and evidence point instead to the benefits of living in a richer country. Parameter values consistent with research on global subjective wellbeing imply higher inequality than prevailing measures, though falling since 1990.
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