Poverty, Inequality, and Development Flashcards
It refers to uneven distribution of total national income among households.
Income inequality
What are the two principal measures of income inequality?
Size distribution (Kuznets Ratio)
Lorenz Curve
This is the most commonly used measure to quantify individual persons or households.
Size distribution
This method does not consider the manner on how the income was earned or received.
Size distribution
What matters here is how much each individual earns irrespective of whether the income is derived solely from employment or from other sources like interest, profits, rents, gifts, or inheritance.
Size distribution
This measure ignores the locational and occupational sources of income.
Size distribution
How do economists and statisticians arrange the individuals’ personal income?
By ascending order
After arranging all individuals by ascending personal income, what happens next?
Dividing the total population into distinct groups or sizes
What are the common methods to divide the population according to ascending income levels?
Quintiles (Fifths)
Deciles (Tenths)
It refers to the 20% proportion of any numerical quantity.
Quintile (Fifths)
A population divided into quintiles would be divided into how many groups of equal sizes?
Five
It refers to the 10% proportion of any numerical quantity.
Deciles (Tenths)
A population divided into deciles will be divided into how many equal groups?
Ten
Kuznets Ratio is named after the Nobel laureate named?
Simon Kuznets
What is the common measure of income inequality where the ratio of the incomes received by the top 20% and bottom 40% are computed?
Kuznets Ratio
What has often been used as a measure of the degree of inequality between high- and low-income groups in a country?
Kuznets Ratio
What is used by Kuznets ratio if the ratio of the incomes received by the top 20% and bottom 40% are computed?
Quintiles
What is used by Kuznets ratio if the ratio of the incomes received by the top 10% and bottom 10% are computed?
Deciles
It is a graphical representation of income inequality or wealth inequality.
Lorenz Curve
When and who developed the Lorenz curve?
Max Lorenz (an American Economist)
1905
Lorenz curve plots percentiles of the population on the what axis?
Horizontal Axis
It shows the cumulative share of income from different sections of the population.
Lorenz curve
It is the situation of being unable or only barely able to meet the subsistence essentials of food, clothing, and shelter.
Absolute Poverty
The extent of poverty is measured through what?
Headcount index
It refers to the number of people who are unable to command sufficient resources to satisfy basic needs.
Headcount index
It is the minimum income required to meet the basic food needs, satisfying the nutritional requirements set by the FNRI.
Food threshold
It is the minimum income required to meet the basic food and non-food needs.
Poverty threshold
What are the high-poverty groups in a given nation?
(WER)
Women and Poverty
Ethnic MInorities and Poverty
Rural Poverty
What is the most valid generalizations about the poor?
- They are disproportionately located in rural areas
- Primarily engaged in agricultural and associated activities
- Likely to be women and children
- Often concentrated amon minority ethnic groups and indigenous peopl
Who makes up a substantial majority of the world’s poor?
Women
In 1996, how many percentages of women made up the world’s poor?
70%
In 1996, how many percentages of women made up the world’s illiterate?
65%
What are the policy options on income inequality and poverty?
(MMMA)
Mitigating the size distribution
Moderating (reducing) the size distribution at the upper levels
Moderating (increasing) the size distribution at the lower levels
Altering the functional distribution
It refers to the amounts of income paid to various individuals or households.
Functional distribution
It represents the total income of individual persons or households.
Size distribution
This level represents the individuals with the highest amount of income in a given population.
Upper Levels
We mitigate the size distribution through what?
Through functional income distribution of an economy
The functional income distribution of an economy can be translated into what?
Into a size distribution
How to translate the functional income distribution of an economy into a size distribution?
By knowledge of how ownership and control over productive assets and labor skills are concentrated and distributed throughout the population.
What does the distribution of the asset holdings and skill endowments ultimately determine?
The distribution of personal income
Moderating the size of income distribution at upper levels can be achieved through what?
Progressive taxation of personal income and wealth
It refers to money that is available to households for spending and saving after personal income taxes have been deducted.
Diposable income
This level represents individuals with the least amount of income in a given population.
Lower Levels
Moderating the size of income distribution at lower levels can be achieved through what?
Public expenditures of tax revenues to raise the incomes of the poor either directly or indirectly
What are the examples of directly raising the income of the poor?
Conditional or nonconditional cash transfers
What are the examples of indirectly raising the income of the poor?
Public employment creation
