Econ Dev Chap 5 Flashcards
Lorenz Curve
a graphical representation in income inequality or wealth inequality developed by Max Lorenz in 1905
Personal or size distribution income
the distribution of income according to size or class of persons
Gini Coefficient (Gini Index or Gini Ratio)
An aggregate numerical measure of income inequality ranging from 0(0%)(perfectly equal distribution of wealth) to 1(100T%)(highest wealth inequality)
Inequality
Occurs when individuals do not possess the same level of material wealth or overall living economic conditions
Income Inequality
the disproportionate of total income among households
- Anonymity
- Scale Independence
- Population Size Independence
- Transfer Principle
Characteristics of Gini Coefficient
Functional distribution of income
the distribution of income to factors of production without regard to the ownership of factors
Land, Labor, Capital and Entrepreneur
What are the factors of production?
- Headcount Index
- Total Poverty Gap
- Human Poverty Index
- Multidimensional Poverty Index (MPI)
Measures of Absolute Poverty
Headcount Index
Measure that talks about the number of people that lives below the poverty threshold/line
Total Poverty Gap
Ratio by which the mean income of the poor falls below the poverty line
Human Poverty Index
Poverty is measured by life expectancy, education, and overall economic situation
Multidimensional Poverty Index (MPI)
Identifying multiple deprivations in life
- Rural
- Women
- Ethnic Minorities
- People in poor countries
Who are the poor?
- Human Capital
- Increase school enrollment for girls
- Rural Development
Policies for poverty alleviation and reducing inequality
