18GottYDistShow

18GottYDistShow - Ch. 18 Income Distribution and Poverty...

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1 Ch. 18 Income Distribution and Poverty Lorenz curve Gini coefficient Distribution of income and wealth in the U.S. Poverty threshold (level) Questions: What explains income inequality? What can (should) be done, if anything?
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2 Income Distribution Person’s income related to primary source of income. If profits, interest, or rent (property income): tend to be at top of the distribution of income. If primarily wages -- tend to be in middle or bottom.
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3 EXHIBIT 1 LORENZ CURVE S FOR THE COM- MUNITIES OF WASHTENAU, SPRINGFIELD, AND HOLMES “Quintiles” Perfect Equality Perfect Inequality Gini Coeff. Washen. = 0 Springfield = 1
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4 EXHIBIT 3 GINI COEFFICIENT G = A / (A+B) 0: equality 1: inequality
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5 1947-1979: Real Family Income Growth by Quintile & for Top 5% Real income: shows purchasing power; corrects for inflation. Has the Gini Coefficient increased or decreased in this period?
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6 1979-2001: Real Family Income Growth by Has the Gini Coefficient increased or decreased in this period?
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7
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8 Causes of Growing Income Inequality Decrease in minimum wage
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This note was uploaded on 07/14/2010 for the course ECON 1 taught by Professor Bergstrom during the Fall '07 term at UCSB.

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18GottYDistShow - Ch. 18 Income Distribution and Poverty...

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