Income Distribution and Undernutrition

Text extracted fromThe World Food ProblemLeathers & Foster, 2004

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Poorest of the Poor• Live in third world• Mostly landless• Work for others, menial jobs• Poorly educated• Illiterate• Superstitious• Squatters who live in huts• Almost no food• Fragmented household• Debt to relatives or lenders

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Per capita incomes differ• Democratic Republic

Congo: $80/yr• Switzerland: $38,330• Average person in

Switzerland makes 500X more than in Mozambique.

• If compute purchasing power parity, difference between richest and poorest countries is 80X

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Purchasing Power Parity

2003

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Global Incomes

Distribution of World GNP (1989)

Human Development Index

• Measures quality of life• High HDI

– High income countries• Low HDI

– Low income countries • HDI not perfectly

correlated with income

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Gini Coefficient• Gini coefficient:

– Based on area of crescent made by Lorenz curve

– measures inequity of wealth– = A/A+B

• Gini index = Gini coefficient x 100

• Lowest inequity is in Japan– Gini coefficient = .249

• Gini index = 24.9– Richest 20% controls 35% of income

• Highest inequity is in Brazil– Gini index= 60.7– Richest 20% controls 64% of income

Global Gini Coefficients

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Kuznets Curve

• As a country develops, rich must get richer first

• Therefore inequity will increase initially

• Later, inequity will drop as prosperity increases

Data from 75 countries

Wealthy out-compete poor for food

• Can outbid poor for food

• Also purchase more livestock– Herd becomes more

dependent on grain– Price of grain is bid up– Harder for the poor to

buy grain

Overall inequity declining slowly

• Global Gini coefficients:– .67 in 1980– .65 in 1990– .63 in 2000– .62 in 2005

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Extreme Inequity Increasing

Child Labor• 250 million children work worldwide

– 22% of workforce in Asia– 17% of workforce in Latin America– 1/3 of children in sub-Saharan Africa

• Jobs– Agriculture– Textiles– Maids and services– Construction and manufacturing– Prostitution

• Many sold into debt bondage– To pay parent’s debt or as collateral– Advance on wages

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U.S. Poor are Wealthy

• Poverty income– $9,359/yr

• Person at poverty line in U.S.– has higher income than

80% of people in the world• 97% poor households in U.S.

have color TV

Middle Class Decline

• Middle class is disappearing in U.S.

• Income gap is increasing between wealthy and poor.

U.S. Inequity increasing

• Gini coefficients:– 1968: 38.6:– 1970: 39.4– 1980: 40.3– 1990: 42.2– 2000: 46.2– 2007: 47.0

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Rich in U.S. getting richer

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Hunger in the U.S.A.• 36.3 million people live in

households that experience hunger – or the risk of hunger – Includes 13 million children– More than one in ten

households in the United States (11.2 percent).

• 1/5 of U.S. food ends up in the landfill

• Source: Bread for the World Institute (2004)

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