Measuring Inequality
- Wealth and income inequality can be measured in a number of ways
- The distribution of wealth owned or income earned by a given percentage can be compared
- It can also be compared in percentage groups, e.g. the bottom quartile shows the share of income of the poorest 25% of households
- Another way is the 90:10 ratio, which takes the incomes of people 10% from the top and 10% of the bottom
- This method eliminates the extremes that you get at either end
- This ratio was 4:1 in 2006 and 1996
- A further measure is the Gini coefficient, which can be used to make international comparisons of income inequality.
- It is found by using a Lorenz curveLorenz Curve
- It is found by using a Lorenz curveLorenz Curve
- The distribution of wealth owned or income earned by a given percentage can be compared
