EC 201 12-5-08 - o Many poorer countries are more unequal...

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EC 201 12-5-08 3, 4, 6, 9, 10, 13, 15, 16, 17 Summary measure for inequality o Most famous: Gini { index, ratio, coefficient o Lorenz Curve o Gini Ratio= (Area between line of equality and Lorenz curve)/(Area below line equality) o Complete equaity: Gini:0 o Extreme inequality: Gini→1 o As more unequal, Gini ↑ o As more equal, Gini ↓ o 1960s, 1970s: US Gini ~0.39 now ~.47 o All other rich countries are more equal than US Gini: ~.30, .35
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Unformatted text preview: o Many poorer countries are more unequal than US Brazil 0.6 S. Africa most unequal o Entire world more unequal than any country Gini~ .65 For annual income o Lifetime income more equal than annual income Gini~ .2, .25 • Wealth o $ value at one time of stocks, bonds, savings accts, home equity o Wealth more unequal than income Gini ~ .85, .9...
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