Tag Archives: per capita income

Median vs Per Capita Income in Africa

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CGD’s Anna Diofasi and Nancy Birdsall compiled median income (2011 PPP) data for 144 countries. In the data they find interesting cases of a mismatch between median and per capita incomes:

the median reflects how much the person at the 50th percentile of the income distribution earns (or spends), giving us a better picture of the well-being of a “typical” individual in a given country. Take Nigeria and Tanzania: in 2010, Nigeria’s GDP per capita (at PPP) was $5,123; Tanzania’s stood at only $2,111. This suggests that Nigerians were more than twice as well off as Tanzanians. Yet, if we compare consumption medians, a different picture emerges: a Nigerian at the middle of the income distribution lived on $1.80 a day, while his or her Tanzanian counterpart had 20 cents more to spend, at $2 a day.

I got curious and made maps of median (2011 $$) and per capita (2010 $$) incomes on the Continent.

income differences

What is going on with median incomes in Central Africa from CAR through to Mozambique? Also, what’s up with Zambia?

exactly when did the rain start beating africa?

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HDI divergence

The new HDI rankings are out. Some in the blogosphere have beef with the new geometric (as opposed to additive) method of calculating final scores. I don’t.

Aid Watch’s beef is that:

The biggest change in method was that the new HDI is a geometric average rather than a normal (additive) average. Geometric average means you multiply the separate indices (each ranging between 0 and 1) for income, life expectancy, and education together and then take the cube root (I know your pulse starts to race here…)

Now, students, please notice the following: if one of these indices is zero, then the new HDI will be zero, regardless of how great the other indices are. The same mostly applies if one of the indices is close to zero. The new HDI has a “you’re only as strong as your weakest link” property, and in practice the weakest link turns out to be very low income (and guess which region has very low income).

My two cents on this discussion is that the Continent looks bad irrespective of how we arrive at its HDI scores. It’s best performers are tiny Botswana and Mauritius. It’s biggest countries and potential engines for growth are the DRC, Ethiopia and Nigeria, need I say more? And per capita income has not changed in most places in half a century.

I rarely disagree with Easterly but on this count I do. Let’s not shift posts for Africa. The idea of “African Standards” is condescending and demeaning to Africans. Norway and Chad look like they are eons apart. If the numbers reflect that fact so be it.

I hope this year’s report embarrasses the African ruling elite enough to wake them up from their stupor (come on, I am allowed one wishful thought per post).

More on this here and here. For a summary of this see Blattman.