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  • ECO102 Pre-Lecture 01

How to Measure Income Inequality in Macroeconomics

Example:

• A perfectly equal society would have a ratio of population to wealth like so:
  • $\begin{array}{cc}0\text{ population}& 0\text{ wealth}\\ 10\mathrm{\%}\text{ population}& 10\mathrm{\%}\text{ wealth}\\ 20\mathrm{\%}\text{ population}& 20\mathrm{\%}\text{ wealth}\\ \dots & \dots \\ 90\mathrm{\%}\text{ population}& 90\mathrm{\%}\text{ wealth}\\ 100\mathrm{\%}\text{ population}& 100\mathrm{\%}\text{ wealth}\end{array}$
  • It's $1$ to $1$ throughout.

Lorenz Curve

Gini Coefficient