EC207 Lecture Notes - Lecture 5: Gini Coefficient, Lorenz Curve, Lewis Acids And Bases
Document Summary
Size (or personal) distributions: deals with how much income individual persons or households receive without giving attention to the sources of income they receive. Quintile: a 20% proportion of any numerical quantity; divide it into 5 groups of equal size. Decile: 10% of any numerical quantity; divide it into 10 groups of equal size. Looking at the ratio of the incomes received by the top 20% and bottom 40% of the population. This is a common measure of income inequality that is called a kuznets ratio. Kuznets ratio in our example is 51 divided by 14, or approximately 3. 64. Lorenz curves: graph depicting the variance of the size distribution of income relative to perfect equality. Vertical axis: share of total income received by each % of population. ** one important observation is that the more the lorenz line curves away from the diagonal (line of perfect equality), the greater the degree of inequality represented.
