Measuring Income And Wealth Inequality:
Economics notes
Measuring Income And Wealth Inequality:
➡️ Income inequality is the unequal distribution of income among individuals or households in a given society.
➡️ Wealth inequality is the unequal distribution of assets and wealth among individuals or households in a given society.
➡️ Income inequality can be measured using the Gini coefficient, which is a measure of statistical dispersion intended to represent the income distribution of a nation's residents.
➡️ Wealth inequality can be measured using the Palma ratio, which is a measure of the ratio of the wealthiest 10% of the population to the poorest 40%.
➡️ Both income and wealth inequality can have a significant impact on economic growth and development, as well as social and political stability.
What is the difference between income and wealth inequality?
Income inequality refers to the unequal distribution of income among individuals or households, while wealth inequality refers to the unequal distribution of assets and liabilities among individuals or households. Income inequality is typically measured by the Gini coefficient, while wealth inequality is measured by the Gini coefficient or the share of wealth held by the top 1% or 10% of the population.
What are the main causes of income and wealth inequality?
The main causes of income and wealth inequality include differences in education, skills, and experience; technological change and globalization; changes in tax and transfer policies; and changes in labor market institutions. In addition, factors such as discrimination, inheritance, and luck can also contribute to income and wealth inequality.
What are the consequences of income and wealth inequality?
Income and wealth inequality can have a number of negative consequences for individuals and society as a whole. These include reduced social mobility, increased poverty and social exclusion, reduced economic growth and efficiency, and increased political polarization and instability. In addition, income and wealth inequality can also lead to health and educational disparities, as well as increased crime and social unrest.