4.2 - Measuring Inequality Flashcards
1
Q
What is the Lorenz Curve?
A
Model for income distribution
2
Q
What is the relationship displayed by the Lorenz Curve?
A
% of national income Vs % population
3
Q
What is the Gini coefficient?
A
Measure of income inequality
4
Q
How does the Gini coefficient represent inequality?
A
Condenses national income distribution into single 0-1 value
Higher number => More unequal
5
Q
How is the Gini Coefficient calculated?
A
Lorenz Curve Areas
A/A+B
6
Q
What do Gini Index’s of 0 and 1 correspond to?
A
0 - Perfect Equality
1 - Perfect Inequality
