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    Ginicoefficients

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    The Gini coefficient is a measure of inequality in a distribution on a scale from 0 to 1. It is calculated as the ratio between the area that lies between the Lorenz curve and the line of equality, and the total area under the line of equality. The document then provides a Lorenz curve graph and table showing the percentage of total market income earned by each quintile of the US population from 2003 to 2005 to demonstrate how to calculate Gini coefficients over time.

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    Ginicoefficients

    Uploaded by

    api-292484442
    530 views4 pages
    The Gini coefficient is a measure of inequality in a distribution on a scale from 0 to 1. It is calculated as the ratio between the area that lies between the Lorenz curve and the line of equality, and the total area under the line of equality. The document then provides a Lorenz curve graph and table showing the percentage of total market income earned by each quintile of the US population from 2003 to 2005 to demonstrate how to calculate Gini coefficients over time.

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    ginicoefficients

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    The Gini coefficient is a measure of inequality in a distribution on a scale from 0 to 1. It is calculated as the ratio between the area that lies between the Lorenz curve and the line of equality, and the total area under the line of equality. The document then provides a Lorenz curve graph and table showing the percentage of total market income earned by each quintile of the US population from 2003 to 2005 to demonstrate how to calculate Gini coefficients over time.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    530 views4 pages

    Ginicoefficients

    Uploaded by

    api-292484442
    The Gini coefficient is a measure of inequality in a distribution on a scale from 0 to 1. It is calculated as the ratio between the area that lies between the Lorenz curve and the line of equality, and the total area under the line of equality. The document then provides a Lorenz curve graph and table showing the percentage of total market income earned by each quintile of the US population from 2003 to 2005 to demonstrate how to calculate Gini coefficients over time.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    WhatistheGiniCoefficient?

    AccordingtoWikipedia,TheGinicoefficientisameasureofinequalityofadistribution.It
    isdefinedasaratiowithvaluesbetween0and1:thenumeratoristheareabetweenthe
    Lorenzcurveofthedistributionandtheuniformdistributionline;thedenominatoristhe
    areaundertheuniformdistributionline.ItwasdevelopedbytheItalianstatistician
    CorradoGiniandpublishedinhis1912paper"Variabilitemutabilit"("Variabilityand
    Mutability")

    A
    GiniCoefficient = A+B

    **LorenzCurve:Graphofpercentageofpopulationvs.percentageof
    cumulativewealthowned

    1. WhatistheareaA+B?Isitalwaysthesame?

    2. WhatdoestheGiniCoefficientmeanintermsofwealthinequalityofacountry?
    Whataresomesocialimpactsofwealthinequality?

    UnderstandingtheGiniCoefficient

    3. Usingthisgraph(withoutprecisenumbers),whatcanyousayaboutwealth
    inequalityinthesevariouscountries?Howdotheycompare?Isthissurprising?

    CalculatingtheGiniCoefficient

    HowhastheGiniCoefficientchangedovertime?Usethefollowingtableofthewealth
    distributionintheUSfromtheU.S.CensusBureautographtheLorenzcurveforeachyear,
    andfindtheGinicoefficients.
    (Hint:ThefirstentrytablecanbereadasIn2003,thebottom20%ofthepopulation
    earned1.5%ofthetotalmarketincome.)

    Quintilesof
    population

    %OwnedofTotalMarketIncome
    2003

    2004

    2005

    Lowest(20%)

    1.5%

    1.5%

    1.5%

    Second(40%)

    9%

    8.9%

    8.8%

    Third(60%)

    23.5%

    23%

    22.9%

    Fourth(80%)

    47.5%

    46.6%

    46.3%

    Highest(100%)

    100%

    100%

    100%

    Exampleofthegraphfor2003:

    4. WhatdotheseGinicoefficientsmean?Doesthismeananythingaboutthetrendof
    incomeinequalityintheU.S.?

    Extension:
    5. Wealthinequalityisahugepartofsomecandidatesplatformsintheupcoming
    presidentialelection.TrytofindthecurrentGiniCoefficientoftheU.S.andcompare
    thattothetrendsyounoticedfromthepreviousgraphs.Doesthisalignwithwhat
    thecandidateshavebeensaying?

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