On a global scale, just 13% of the world’s population could be considered middle income in 2011, according to a new Pew Research Center analysis of the most recently available data. Most people in the world were either low income (56%) or poor (15%), while only 9% lived at an upper-middle-income standard and 7% were high income.
See where you fit.
“Start by entering your household’s income in 2014 in the currency of your country (our study covers 111 countries). This could be in daily, weekly, monthly or annual terms. Ideally, it should be the total income of all earners in the household. Your best guess will do. Next, enter the number of people in your household, including yourself” says Pew.
“The calculator estimates your equivalent income in 2011 and reports where you and others in your country might have stood in the global income distribution that year.
As our study defines it, people who are middle income, globally speaking, live on $10.01-20 a day, which translates to an annual income of $14,600 to $29,200 for a family of four. The other four income groups are defined as follows: The poor live on $2 or less daily, low income on $2.01-10, upper-middle income on $20.01-50, and high income on more than $50. All figures are expressed in 2011 prices and converted to 2011 “purchasing power parity dollars” (exchange rates adjusted for differences in the prices of goods and services across countries).” says Pew.
How does the calculator work?
“The household income you enter is converted to daily income per person in your household. Then, income for 2014 is adjusted for inflation from 2011 to 2014 using your country’s national consumer price index. This is done to allow for the likelihood that some of the change in your income from 2011 to 2014 is due to inflation in the period. The income is further adjusted for changes that may have occurred over and above any changes from inflation, i.e., for “real” income growth from 2011 to 2014.
Finally, income is converted from national currencies to purchasing power parity dollars. Because PPPs contain an adjustment for differences in the prices of goods and services across countries, this step makes your income comparable with that of people in other countries.
The end result is an estimate of your household’s daily per capita income in 2011, expressed in 2011 prices and 2011 purchasing power parities, yielding your placement in the global income distribution in 2011. (The estimated income is shown as the nearest whole number, but your place in the global distribution is based on a more precise estimate. For example, the calculator shows estimated daily incomes of both $9.90 and $10.30 as $10 per day, but the income bracket will be reported as low income in the former case and as middle income in the latter.)” says Pew
“One of the limitations of the calculator is that it only works for the 111 countries covered in the Pew Research study. The other key limitation is that the adjustment we make for inflation and for real income growth from 2011 to 2014 is the same for all people from a given country. Your individual experience may, of course, be different.
If your income increased at a faster rate than the national average from 2011 to 2014, the calculator overestimates your income in 2011. Suppose that you live in the U.S. and you earned $50 per day in 2014. Further suppose that your income in 2011 was $40 per day. This means that your personal income growth from 2011 to 2014 is 20% (using 2014 as the base and accounting for both inflation and real income growth). But if national income in the U.S. increased only 10% from 2011 to 2014, the calculator will estimate your 2011 income to be $45 per day (again, using 2014 as the base), greater than what it truly was.
Is this overestimate a problem for determining your place in the 2011 income distribution? Only if the overestimate puts you across a threshold for an income group. In the example above, the calculator will report that you were upper-middle income in 2011. That is correct whether your income in 2011 is $40 per day or $45 per day.
The same reasoning follows for people whose income growth may have been less than the national average from 2011 to 2014. For them, the calculator understates income in 2011 and may report placement in a lower income category in the global distribution than it would with a more precise estimate. However, as noted, this will happen only if the underestimate results in the crossing of a threshold for an income group.” says Pew.