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Q8.4)
Formula for Gini Coefficient from Lorenz Curve
A / A + B
What does the A and B represent?
Step by step
Solved in 2 steps
- Table 15.9 shows the share of income going to each quintile of the income distribution for the United Kingdom in 1979 and 1991. Use this data to calculate what the points on a Lorenz curve would be, and sketch the Lorenz curve. How did inequality in the United Kingdom shift over this time period? How can you see the patterns in the quintiles in the Lorenz curves?Why is there reluctance on the part of some in the United States to redistribute income so that greater equality can be achieved?If a country had perfect income equality what would the Lorenz curve look like?
- Here is one hypothesis: A well-funded social safety net can increase economic equality but will reduce economic output. Explain why this might be so, and sketch a production possibility curve that shows this tradeoff.Using two demand and supply diagrams, one for the low-wage labor market and one for the high-wage labor market, explain how information technology can increase income inequality if it is a complement to high-income workers like salespeople and managers, but a substitute for low-come workers like file clerks and telephone receptionists.(c) Draw the Lorenz curve.
- 1. Below is a hypothetical breakdown of the income distribution in a country. Use those calculate what should be graphed on the Lorenz curve and then sketch a Lorenz curve for those given numbers. Using that Lorenz curve show how a Gini coefficient would be calculated and explain what the values of the Gini coefficient mean. (you do not have to calculate the Gini, just describe how you could do so)? Quintile Bottom 20% Lower Middle 20% Middle 20% Upper Middle 20% Top 20% Percent of GDP Received 16 20 $2Share of Income 0.8 0.6 0.4 0.2 Ao 0.2 04 Perfect-Equality Lorenz Curve 10 D=15 0.6 Actual Lorenz Curve 0.8 B 7 C can someone calculate the gini coefficent please? ASAP5- Calculate Gini coefficient for a country with the following deciles in income share data: Country X: 30 (richest quantile) 20 What is the area under the Lorenz Curve? Please show your diagram. 10 5 5 5 5 3 2
- Cumulative percentage of income 90 80 70 60 50 40 30 20 10 O d 40 20 60 80 Cumulative percentage of population If the area of inequality (area between the line of perfect equality and the Lorenz Curve) equals 0.35 and the area beneath the line of perfect equality (given by OAB in the diagram) equals 0.7, calculate the Gini coefficient. A O AOS о в. 0,6 OC. It is impossible to calculate with the information provided. OD. 0,5 100The Lorenz curve for Bangladesh looks like this: Cumulative percentage of income 100 58.7 37.4 21.3 8.9 Bangladesh Lorenz Curve 20 60 80 Cumulative percentage of population 40 100 04 How much income do individuals in the second income quintile in Bangladesh receive?3. Comparing Gini coefficients of different countries Aa Aa The following diagram shows the Lorenz curves for three countries. Country X's Lorenz curve is shown in blue, Country Y's Lorenz curve is shown in red, and Country Z's Lorenz curve is shown in green. Region I is the area above Country X's Lorenz curve and below the 45-degree line. Region II is the area below Country X's Lorenz curve and above Country Y's Lorenz curve. Region III is the area below Country Y's Lorenz curve and above Country Z's Lorenz curve. Region IV is the area below Country Z's Lorenz curve. INCOME (Cumulative percent) 100 80 60 40 20 0 The Gini coefficient for Country Z is given by Couny X 20 Country Y Country Z 11 III 60 IV 40 100 HOUSEHOLDS (Cumulative percent) 80 has the highest Gini coefficient.
