Module 2 Flashcards
Le Grand (1992) raises a number of important issues in defining and measuring inequality - these include?
- Absolute or relative
- What to include
- What (population) unit to consider
- Annual income or lifetime income
- What point determines poverty
- Number of people or ‘degree’ of poverty
- Duration of poverty
- Minimum standards - equality of opportunity
In 2011-2012 what did Australia’s income distribution look?
Wealthiest 20% had 61% of Australia’s net worth ($2.2M per household average)
Poorest 20% had 1% of Australia’s net worth ($31.2K per household)
What is the trend in Australia Income inequality?
- Considerable pre-tax inequity
- Increased over past two decades
- Inequality increased most in top quintile
- In 1999-2000 only 4.5% of income share accrued to lowest quintile and 46.7% to top quintile
What is the Lorenz curve?
Created by Max Lorenz in 1905 it shows the distribution of wealth across the population. It also shows perfect equality at 45%.
What is the Gini Coefficient?
It is the ratio representing the area between the Lorenz curve and the line of perfect equality relative to the area between the axis and the line of perfect equality.
In 2011-2012 what did Australia’s Gini Coefficient look like?
It had risen from 0.292 in 1996-1997 to 0.320 in 2011-2012
What are the factors (problems) that affect observed income inequality?
- taxes
- transfers
- non-monetary or in-kind transfers
- time
What are the causes of income inequality?
- Differences in ability
- Education and training
- Job tasks and risks
- Property ownership
- Market power
- Luck, connections, misfortune and discrimination
What are the arguments for equality?
- Income inequality impedes the maximisation of customer satisfaction
- Inequality impairs productivity
- Inequality fosters non-economic inequalities
What are Pusey’s views on Australia as a ‘nation-builder’?
Since the 80’s period of neo-liberalism - Australia is held subject to the market. He states from three viewpoints:
1) Politics is no longer about grass roots, but about the Party and profit
2) Federal government is not doing enough in infrastructure or public spending though it has the ability to
3) Australian’s believe the Government can do more and want the Government to do more to build a fair, secure and prosperous future for all.
What are the catalyst items that Pusey documents?
- Global warming
- Demand to rebuild infrastructure (falling behind)
- Demand for constructive governance over neo-liberalism
- Public is tired of profit generating reform.
Gruen suggests better measures of economic performance - what are these?
- real GDP per head
- % growth of GDP per head
- GDP per hour worked
- Growth in GDP per hour worked
- average inflation
- average unemployment
Gruen also suggests that economic growth should consider quality of life, what are his indicators?
- Human development index - life expectancy, education, GDP per head
- Gender disparity index - status of women
- World values survey - trust, life satisfaction
- Commercial corruption
- Income inequality
What qualities are missing from Gruen’s quality of life indicators?
- Environmental protection
- Sustainable resources
- Political freedom measure
- Equitable tax distribution
- Infrastructure sustainability
- Measure of crime
What is nation building?
Butcher (2008) describes it in two ways: soft - reconciliation between indigenous and non-indigenous or hard - infrastucture
