Just how rich are you?
Sure, you might not feel all that rich compared to the mansions and millionaires around you, but what if you compared yourself to the global poor?
If you’ve played around with Giving What We Can’s “How Rich Am I?” calculator, you may have found that you’re much richer than you thought. For example, a family of four in the United States earning the typical (median) amount of income (about $50,000) is actually 7.7x richer than the typical person worldwide.
But what you might not know is that Giving What We Can recently updated the calculator with the latest research into worldwide income distribution. Branko Milanovic, an economist and researcher at the World Bank, updated the figures. Previously, the calculator had used 2002 data, but is now updated to 2008 numbers, the latest year for which there are surveys for most countries. Furthermore, all calculations are adjusted for inflation and also now adjust for 'purchasing power parity', or the fact that goods are more expensive in some countries than others. Milanovic’s research and approach can be found in his book 'The Haves and Have Nots' and the forthcoming 'Worlds Apart'.
This new data also shows that the typical global income has risen since 2002 because of solid economic growth across much of the developing world over that period. People in the developed world who previously found themselves in the 99th percentile might now find themselves in the 98th or 97th percentile instead. This is a great thing! Nonetheless, such a person would still have an income more than 30 times higher than the bottom third of Indians. The typical person globally is still living on what just $4.10 would buy you in the US each day.
One should note that the calculator will not display data for people below the 80th percentile of earnings worldwide (i.e., individuals earning less than $7,000, or a four person household earning a combined income under $27,000). Those who would like the full distribution for each country should use the World Bank's PovcalNet.
However, with this new update, the 'How Rich Am I?' calculator is the most accurate simple income calculator on the web, and should be a useful tool for those wanting to place yourself on the distribution. So give it a go and see how truly rich you are, compared to the rest of the world!