ABSTRACT
In this chapter, Cary S. Fields raises more doubts about the income inequality data used in many studies and challenges the interpretation of those data. He begins by pointing out a number of flaws in the inequality data, noting that the approach to studying the question has almost always been to examine relative inequality. Through a series of numerical examples, Fields shows that relative inequality can increase while absolute poverty declines. He believes that the relative approach is fixated on subjective conditions, and he thinks it preferable to study the objective conditions under which the world’s poor live. Fields presents evidence to show that there is very little support for the inverted U curve first suggested by Kuznets. Further doubts are cast on the U curve through a brief examination of some historical trends in distribution. Finally, Fields reinterprets the Brazilian and Indian cases, showing that in spite of worsening relative inequality in Brazil, absolute poverty declined, whereas in India absolute poverty worsened significantly even though the distribution of income did not.
