Inequality - the gap between two countries could be getting...

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Inequality – gap vs. proportion: Inequality is about ratios, not gaps. This means that inequality occurs when one unit possesses a share of something that is bigger or smaller than the average share for all units. This inequality can be measured in terms of income, assets or consumption and all of these indices are based on the principle of disproportionality More on gap vs proportion-Lisa Lecture inequality occurs when units posses a share psomething athat is bigger or smaller than the average share for all units. inequality is based on ratios not gaps proportionality:shares are proportionate when the ratio of the persons income to the average to the average income is one income gap is useless unless yoou know the total average inequality does not increase if income is growing at the same time for rich and poor people or country
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Unformatted text preview: the gap between two countries could be getting larger, however, inequality coes not increase if the ratio is the same Gini coefficient 1. Definition Gini is a measure of inequality within a country. It captures the idea that inequality is about differences in proportions and not differences in gaps. A lower Gini coefficient meanst A higher Gini coefficient means 2. Example--we can study how globalization may have increased inequality in developing countries. In fact, the index allows for comparison among any population, showing inequality within developed countries like the U.S. as well. The Gini coefficient is used as a measure of inequality in income or wealth. he coefficient varies from zero to one and this ratio is formulated by dividing A by A+B. A being the area above the Lorenz Curve and B being the area below it....
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