Letters

SIR – Ian Castles (Letters, May 26th) says that world income distribution has become more equal over the past 25 years. My article (“Winners and losers”, April 28th) shows why one cannot make such an unqualified statement. Of the many plausible measures, Mr Castles's statement rests on the one most favourable to the view that inequality is falling. In particular, he uses PPP exchange rates, which introduce a very substantial downward bias. If we are interested in distribution from the point of view of issues such as migration, the marginalisation of developing countries and capacity to repay foreign debts, we should compare incomes with market exchange rates. The conclusion is then unambiguous: distribution became much more unequal over the past quarter-century.