Applied Economics & Statistics B: Topic 1 - Inequality

Question 1

Why do we mind inequality?

Answer 1

1) Welfare consideration:
* The perceived status of the individual.
* Happiness.
2) Trust and social capital:
* Deviations from cooperation
* Damages on social capital and trust
* Crime rates (in particular, violent crimes).
The literature remains controversial -which
direction of causality?

Question 2

Why is there some evidence between inequality and violent crimes?

Answer 2

Think about it from the pov of a really poor person. They have in a sense ‘nothing to lose’ because their socioeconomic state is so poor. So they’re more willing to commit crimes to gain wealth

Question 3

Describe the graphical evidence for inequality and violent crimes

Answer 3

There’s a positive line of best fit from (~21,~-0.3) to (~58, ~2) of a scatter graph with ‘Gini Coefficient’ in x-axis ranged from 20 to 65 and ‘logs of Intential Homicidal Rates’ in y-axis ranged from -2 to 5