Income Inequality Definition Pdf

The importance of inequality many examples attest to the dramatic extent of inequality within and between countries.

Income inequality definition pdf. Others focus on income inequality as bad for instrumental reasons seeing it as causing conflict limit ing co operation or creating psychological and physical. This is not necessarily true in a. Income definition is disposable household income from lis. A measure of income inequality based on the lorenz curve.

The less equal the distribution the higher income inequality is. In 1998 the average consumption levels of the richest. If income were perfectly equally distributed then the poorest 20 of hh would receive 20. Income inequality or income disparity is the degree to which total income is distributed unevenly throughout a population.

Time income inequality increased by 12 percent for the low income and the lower middle income groups of countries. In 2000 the richest country in the world luxembourg enjoyed a per capita gross national income level more than 90 times that of the poorest sierra leone. Some people consider high levels of income inequality are morally undesirable. The terms poverty and inequality are often intertwined in a manner that suggests that these two factors are closely related.

Income inequality is often accompanied by wealth. Data for all countries except sweden come from lis. A large body of research investigates the causes of the growth in income inequality in the united states since the 1970s. The lorenz curve has a bowed shape because of income inequality.

Based on table 1 data. Income inequality headcount poverty and growth for a given average income level of a country high inequality usually can be associated with high levels of headcount poverty. The only income status group that showed a decline in the level of income inequality was the group of the upper middle income countries a decline of 7 percent table 3 4. Regardless in both cases the dominant factor in producing income inequality growth in recent decades has been the growth of what they term upper tail inequality 4.

Using the gini coefficient to measure income inequality figure 2. Income inequality income inequality is an indicator of how material resources are distributed across society. In many cases of economic inequality wealth flows disproportionately towards a small number of already financially well off individuals.