Income Disparity Measurement

This article discusses the problems of measuring income disparity especially in the developing world. A substitute structure of measurement frequently employed by the third world has been the use of per capita GNP facts and figures (GNP/c), however, the consideration of purchasing power parity (PPP) has been made and changes have been made accordingly. The changes made in this system compare the local prices of products, merchandise and services of that particular country with the international prices of the same commodities. By utilizing the identical comparative prices for each and every product and services, the researchers evaluated the income measurements that had been changed for purchasing power parity (PPP). The results of the measurements model that considers the purchasing power parity (PPP) and changes the GNP/c accordingly is different from the model that disregards the changes.