The International Policy Center recently published a report on improving measurements for global inequality by a research team at The New School for Social Research’s Schwartz Center for Economic Policy Analsysis (SCEPA). The research brief, titled, “The Vast Majority Income (VMI): A New Measure of Global Inequality,” is the work of Anwar Shaikh, a professor of economics at NSSR and a faculty research fellow at SCEPA, and research assistant Amr Ragab.

The SCEPA team addresses the shortcomings of GDP per capita as the most popular measure of international levels of development as an “an imperfect proxy for important factors such as health, education, and well-being.” They propose a new measure called the Vast Majority Income (VMI), which represents the average income of the first 80 percent of the population. By removing a country’s most wealthy from the average, the VMI provides a direct measure of the standard of living of the vast majority. The SCEPA team hopes this new tool will broaden the discussion of international inequality and shed new light on several important issues, such as the relationships between inequality and development, trade liberalization, gender, and political instability.

The International Policy Centre is jointly supported by the Brazilian Institute for Applied Economic Research (IPEA) and the Bureau for Development Policy at the United Nations Development Programme. This research brief is based on the authors’ SCEPA Working Paper, “An International Comparison of the Incomes of the Vast Majority,” and the subsequent SCEPA Policy Note available at the SCEPA Website.