Using the national income/expenditure distribution data from 111 countries, we decompose
total inequality between the individuals in the world, by continents and regions.
We use Yitzhakis Gini decomposition which allows for an exact breakdown of the Gini.
We find t hat Asia is the most heterogeneous continents; between-country inequality
is much more important than inequality in incomes within countries. At the other
extreme is Latin America where differences between the countries are small, but inequalities
within the countries are large. Western Europe/North America is fairly homogeneous
both in terms of countries mean incomes and income differences between individuals.
If we divided the world population into three groups: The rich (those with incomes
greater than Italys mean income), the poor (those with income less than Western countries
poverty lie), and the middle class, we find that there are only 11 percent of people
who are world middle class; 78 percent are poor, and 11 percent are rich.