Poverty & Inequality

Poverty & Inequality - Main Concepts Measures of...

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1 Main Concepts ± Measures of inequality: Lorenz Curve, Gini coefficient ± Defining Poverty ± Efficiency/Equity trade off Measuring Economic Inequality The Income Lorenz Curve The income Lorenz curve graphs the cumulative percentage of income earned against the cumulative percentage of households.
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2 Measuring Economic Inequality Measuring Economic Inequality The Gini Ratio To measure inequality as an index number, we use the Gini ratio , which equals the ratio of blue area to the red area in the two figures below.
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3 Measuring Economic Inequality Who Are the Rich and the Poor? The five characteristics that influence income earned by a household are: ± Education ± Type of household ± Size of Household ± Age of householder ± Race Measuring Economic Inequality
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4 Measuring Economic Inequality Poverty: household’s income too low to buy food, shelter, and clothing deemed necessary. Poverty is a relative concept. Measuring Economic Inequality
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This note was uploaded on 12/14/2010 for the course ECON 001 taught by Professor Stein during the Fall '07 term at UPenn.

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Poverty & Inequality - Main Concepts Measures of...

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