Definitions in economic inequality - ECO1016
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6 Terms
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Gini Coefficient
A measure of income inequality within a population, ranging from 0 (perfect equality) to 1 (perfect inequality).
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Lorenz Curve
A graph of the cumulative share of income against the cumulative share of households by income, used to illustrate income distribution.
3
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90:10 income ratio
The ratio of the income of the top 10% over the income of the poorest 10%
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Benefits of inequality
Provides incentive to work hard and efficiently
5
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Costs of Inequality
Social unrest
Diminished ability to deal with natural disasters, financial shocks
Diminished health outcomes (life expectancy, obesity, and mental health)
Deteriorate societies' education outcomes
Increase crime
Reduce economic growth
6
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The Mincer Equation
