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Income Distribution

The way in which income is shared among individuals or households in an economy.

Size Distribution

Focuses on individual or household income without considering the source of income.

Functional Distribution

Divides income among production factors like labor and capital.

Quintiles

Population divided into fifths to analyze income distribution.

Deciles

Population divided into tenths to analyze income distribution.

Kuznets Ratio

Compares the income of the top 20% to the bottom 40% to measure income inequality.

Lorenz Curve

Graphical representation of income distribution comparing population percentage to income percentage.

Perfect Equality

A situation where everyone receives an equal share of income, represented by a diagonal line on the Lorenz curve.

Income Inequality

The degree to which income is distributed unevenly among a population.

Gini Coefficient

A measure of income inequality ranging from 0 (perfect equality) to 1 (perfect inequality).

ACWI

Ahluwalia-Chenery Welfare Index, which weighs income gains by the poor more heavily than those by the rich.

Absolute Poverty

A condition where individuals cannot meet basic needs, often defined as living on less than $1.90 per day.

Headcount Index

The proportion of the population living below the poverty line.

Poverty Line

A fixed income level below which individuals are considered to live in absolute poverty.

Total Poverty Gap

The total income needed to bring all individuals below the poverty line up to that line.

Foster-Greer-Thorbecke Index

A measure that accounts for the depth of poverty, not just the number of people below the poverty line.

Coefficient of Variation

A measure of income inequality used alongside the Gini coefficient.

Multidimensional Poverty Measurement

An approach that considers various deprivations beyond income.

Dual Cutoff Method

Identifies multidimensional poverty using cutoff levels for different dimensions.

Multidimensional M Index

Similar to the P index for income poverty, capturing multiple deprivations.

Millennium Development Goals

Global goals aimed at reducing extreme poverty, including halving it by 2015.

Child Poverty

Higher incidence of poverty among children, with many living in multidimensional poverty.

Female Poverty

Women face greater deprivation due to lower earning capacity and limited access to resources.

Indigenous Peoples

Often marginalized and face severe poverty due to conflicts over resources.

Rural Poverty

Over two-thirds of the poor live in rural areas, primarily in agriculture.

Economic Growth

The relationship between poverty reduction and economic growth is complex and debated.

Access to Credit

Widespread poverty limits access to financial opportunities, hindering growth.

Functional Distribution of Income

Measures income received by different factors of production as a whole.

Labour Income

Most people's income comes from labor, with many in developing countries in informal employment.

Policy Options

Developing countries must implement effective policies to reduce poverty and income inequality.