Income Inequality And Poverty Flashcards
Gini coefficient
Measure of the degree of inequality of income in a country
=area between line of perf equality and Lorenz curve / area under line of perf equality
Lorenz curve
Relationship between the cumulative % of households and cumulative % of income
Life cycle
Regular pattern of income variation over a persons life
Permanent income
Persons normal income
Poverty rate
% of pop whose household income is less than absolute level (poverty line)
Absolute poverty
No access to basics of life
Relative poverty
Can’t access what is considered acceptable standards of living in society
Utilitarianism
Political philosophy acc to which gov should choose policies to max total utility of everyone in society
Liberalism
Gov should choose policies deemed to be just, as evaluated by an impartial observer behind a ‘viel of ignorance’
Maximin criterion
Claim that the gov should aim to max well being of the worst off person in society
Libertarianism
Gov should punish crimes and enforce voluntary agreements but not redistribute income
Social security
Gov benefits that supplement the incomes of the needy
Negative income tax
Collects Rev from high income households and gives transfers to low income households
In kind transfers
Transfers to the poor given in the form of goods and services rather than cash
