Class01b_measurement.pdf

Class01b_measurement - Econ 473 Class 1 Measurement of...

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 473 Class 1 Measurement of inequality 1. Graphical representations
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Some possible sources of income inequality Skills/education Age/experience Luck Choices: occupation, hours worked... Background/connections Inheritance
Image of page 2
Some possible drivers of increasing income inequality Changes in... Technology/automation/skill-biased technical change Taxes Education expansion Changes in institutions, e.g. deunionization Social norms (e.g. about CEO pay) Balance of power, rent-seeking
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Some possible drivers of increasing income inequality Changes in... Technology/automation/skill-biased technical change Taxes Education expansion Changes in institutions, e.g. deunionization Social norms (e.g. about CEO pay) Balance of power, rent-seeking Which drivers matter is important for whether policy response works and whether it is desirable.
Image of page 4
Today: Measurement For today, ignore considerations of what exactly to measure. I Just refer to “household income”. I Thus ignore: F which social unit are we referring to (person, household, adjusted household?) F which of their attributes we’re measuring (income, wealth, consumption...) Just study some measures and their properties. After this: Let theory guide us what to measure, and how.
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
What does an inequality measure do? If we only cared about say the income share of homogeneous workers vs homogeneous capitalists, a simple number would su ffi ce. In reality, these groups are heterogeneous, and may overlap. Diagrams show the heterogeneity well.
Image of page 6
3 diagrams 1 Pen’s Parade of Dwarfs 2 the frequency distribution (histogram, pdf, cdf) 3 the Lorenz curve 4 (log transformations)
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Example data Ideally have individual-level data. Today use grouped data from Statistics Canada, for individual earnings in 2011. Groupings raises some issues that we will not discuss in this course (see Cowell). Show data.
Image of page 8
Pen’s “Parade of Dwarfs” 1 Order people by their income. 2 Assign each their income level as “height”.
Image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern