Ideas to Action:

Independent research for global prosperity

The Median Is the Message: A Better Measure of Development (presentation)

11/6/13

Abstract

Using household survey data available from the World Bank’s PovcalNet tool, we compare median household consumption expenditure per capita to other commonly used measures of material well-being, both across countries and over time. We demonstrate that the ratio of the survey-based mean to the median provides a simple indicator to describe a country’s income or consumption expenditure distribution. We argue for incorporating survey-based median household consumption expenditure per capita into development indicators as a “good-enough” single indicator of both typical individual material well-being, as well as the distribution of material well-being. As a post-2015 indicator of progress at the country level in reducing inequality, we propose that the rate of increase in median consumption per capita after taxes and transfers exceed the rate of increase in mean consumption in the same period.