Questions tagged [inequality]

Differences in resource allocations or opportunities that arise within or between countries.

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19 views

How does monetary policy affect inequality?

My thought process here would be that since government bonds are usually held by the richer households, buying of these government bonds would inject a large amount of money only to the richest, thus ...
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31 views

Social mobility and income inequality

I once read an argument by the libertarian economist Thomas Sowell against the conventional wisdom that rising income is bad because most statistics which show rising income inequality do not account ...
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1answer
27 views

Fehr & Schmidt, ultimatum game, inequaltiy aversion, perfect subgame Nash equilibrium

I am preparing for an exam. I have found an old exam but I have no solutions for it, so I tried to solve it, but I dont know if I did it correctly and need therefore your help. The problem looks as ...
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78 views

Why does Denmark have such a huge disparity between its income and wealth Gini coefficients?

(After-transfer) income inequality and wealth inequality are obviously not the same thing, but I would intuitively expect that, all else equal, they would be reasonably well correlated across ...
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Unit of analysis for income distribution, adult equivilence

Over the last few years I have seen a number of tussles over income distribution measurement in the economics journal literature between people drawing data from different sources and maintaining that ...
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26 views

Ideal levels of inequality

Has any work been done to try to figure out what a productive level of wealth and income inequality is in a country? i.e. the minimum to provide incentive for 'hard' work, and necessary risk taking in ...
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1answer
15 views

World Inequality Database: Top 10% Income Share U.S. vs. Top 10% Average Income

I want to use the U.S. data from the World Inequality Database for a VAR analysis. However, I am confused as to why the series for the top 10% income share only runs back to 1962, while the series for ...
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1answer
59 views

What if price were a function of buyer's income?

If everyone's income were public information, would purely profit-seeking sellers benefit from charging different prices to people based on their different incomes? My intuition says yes because a ...
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16 views

Does PPP measure conversion taken into account government service and taxes?

Apology in advance if this question seems too elementary. I am intrigued by this article I came across,Do We Care About Income Inequality, or Absolute Well-Being? And in the article the author was ...
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56 views

Data Set of Bourguignon and Morrison 2002 AER

This question is about the following paper: F. Bourguignon and C. Morrison "Inequality among World Citizens: 1820-1992", American Economic Review, Vol. 92, No. 4. (Sep., 2002), pp. 727-744. On p.730,...
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54 views

labor share and growth

Is there a link between the level of the labor share and growth? In standard models growth is the rate of (labor augmenting) technical progress and labor force. So does that mean if the labor share ...
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Is there an income inequality metric which also considers the total income?

I'm trying to compare some data I have about two companies, and in order to do so I need to compare their income inequality, but also to take in consideration the total income of each. For example if ...
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Has any research found that automation will decrease inequality?

A paper by IMF researchers (but not an official position of the IMF) has found that automation will lead to higher inequality under all scenarios they considered. Even in the scenario where robots ...
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38 views

Is there a theoretical basis for any popular income- or wealth-distribution model?

When modelling income or wealth, we probably want a continuous distribution with a lower bound; statisticians have named many, but Pareto and log-normal distributions have been among the most ...
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A unique global currency and a balanced macroeconomic system

During my last trip, I traveled in Bolivia for two months, and I was struck seeing how life was cheap there, from a European point of view. I believe that is the same in the great majority of the "...
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1answer
65 views

Measuring inequality at the zip code or county level in the United States?

I am trying to calculate a statistic for inequality at the zip code or county level in order to merge with another data set. I am using IRS SOI data, but the data given is returns by AGI bin (i.e., 1-...
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4answers
125 views

Is wealth inequality actually a problem

I have been searching around online, but cannot really find an answer to my question. I can find a lot of material covering wealth inequality and how it has developed over time, but haven’t found any ...
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1answer
28 views

Dimensional analysis for the qdf/quantile function corresponding to the pdf/CDF for the size distribution of income

I have previously posted a very similar question on Stackoverflow, but based on responses there I have decided that the real nub of my question is economic. I will give a longish introduction, mainly ...
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2answers
80 views

Productivity and wages in a task-based model

In a task-based model like the one developed in Acemoglu&Autor 2011 with two types of worker, can the low type have a higher wage with respect to the high type? More specifically: if the ...
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Has the shrinking of the American household improved or diminished household welfare?

Over the last fifty years U.S. average household size has declined dramatically. When making within-year comparisons of household income, it is regarded as good practice to adjust for adult-equivalent ...
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54 views

What would happen if there was a one-time redistribution of wealth from the wealthiest 1% to the other 99% of people in the US? [closed]

If you think this is going to lead to answers which are too speculative, let me know, but I think it should be possible to at least make some strong educated guesses... What would happen if there was ...
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1answer
405 views

Is inequality good for growth? [closed]

I was reading about the debate about income inequality and I would like to know your opinion on the matter. Basically, the positions are two: the classical one, which states that inequality is good ...
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1answer
52 views

How much the wealth inequality increased in the USA in the last decades?

Are there any studies trying to measure the increase of the wealth inequality in the USA? Say for example how much it increased, comparing with 1990. Or compared with any other moment in time after ...
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3answers
163 views

Explaining the development of income inequality

I'm a syndicated writer working on an explainer about income inequality and I realized I didn't really understand how it can possibly develop in an economy where all dollars are spent. That is, let's ...
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How many of the world's workers are producing luxury vs necessary goods?

Has there been any scholarship done on the proportion of producers producing high-end vs low-end goods? This could also be framed as the proportion of economic activity generated by wealth excess of a ...
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1answer
293 views

Has US real median personal/household income been stagnant since the late 1970's/early 1980's?

This is referring to an earlier question: Why are real median household incomes stagnant? How do the following graphs actually tell you that US real median personal/household income has been stagnant ...
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1answer
50 views

Looking for an article in Behavioral Economics about Inequality

I have been searching for an article that I know exists, but somehow am unable to find. The article is about an economic game where participants are assigned to a group, and can observe how much ...
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1answer
97 views

Measuring asymmetry between countries GDP per capita

I am looking for an objective way of measuring the "asymmetry" (the overall level of difference) of the GDP per Capita in groups of countries involved in an international agreement. So far, the best ...
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1answer
131 views

Allocative efficiency — correlation between MB and p in populace with wealth inequality

I was reading a paragraph in an economics textbook that was talking about resource allocation, and felt that it missed an important point, leading to a conclusion that I disagreed with. I was hoping ...
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531 views

Gini with negative incomes

I have data on disposable income, where some households have negative income. Albeit I can immediately compute the Gini with these dataset (e.g. with ineqdec0, <...
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1answer
477 views

Gini coefficients and median / mean income ratio

Simple question: If the GINI coefficient (market incomes) goes up, is it a necessary feature that the mean income rises relative to the median?
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1answer
1k views

Gini index vs Herfindahl index: one increases while the other decreases

I am comparing two vectors of values which indicate portfolio weights in monetary units at two different dates. I wanted to quantify if the concentration in the portfolios changed. So I moved on with ...
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2answers
80 views

if the richest 85 people give away all their money?

I once heard a fact that the richest 85 people are as wealthy as half the world's population put together. My question is, what does that mean? Does it mean that there is some feasible method in ...
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1answer
174 views

What is the correct economic term for beneficial “transaction frequency”?

I am not an economist but I am trying to track down and understand an economic principal (and/or theory) that I think is called "transaction frequency" but when I go searching on that term I find only ...
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95 views

In a context of globalisation and high wage inequality, why should governments help unskilled workers?

With globalisation, wage inequality continues to be a strong issue for many developed nations. What I seek to find out here is, why should we even do anything to help the unskilled workers? From ...
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5answers
3k views

Calculating Gini Coeffecient

What's the fastest way (or formulae) of manually calculating Gini Coefficient of equal-sized bin income data? Example: No of individuals in group: 4 4 4 4 4 Income of each group: 1 2 3 4 5 ...
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2answers
166 views

Could the upper quintile pay the annual federal personal income tax for all other quintiles from their annual income?

I am wondering if, in theory, the upper quintile (20% of earners in the U.S.) could pay the annual federal tax bill for all quintiles from their annual income? I have been looking at 2013 CBO data ...
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313 views

How is money created?

This might seem like a really simple question, but I am really troubled by it on a macro scale. The money has to come from somewhere. Someone might start up a business that creates things or takes ...
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1answer
71 views

In what way specifically are US CEO's able to engage in rent-seeking and exploit corporate governance to increase compensation?

I've seen videos where Prof. Stiglitz mentions CEO compensation associated with rent-seeking: https://youtu.be/b7wIw1VNjSk?t=29m58s https://youtu.be/heOVJM2JZxI?t=41m28s I looked on the web and saw ...
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Is there proof that today more than 50% of the lowest income society lives worse than 50 years ago

The Economist on 12.11.2016 number (first number after getting US election results) wrote: "In real terms median male earnings are still lower than they were in the 1970s. In the past 50 years, ...
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Is it true that the eight richest men have more wealth than the bottom 50% of world population?

This statistic from Oxfam, an anti-poverty consortium, has been reported in prominent media outlets (example). Other articles dispute this statistic as misleading due to flimsy assumptions about debt (...
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870 views

Determining the Gini Coefficient in a 2 person economy [closed]

In a 2-person economy, the owner of a firm pays 20% of the total output to the worker. What is the Gini coefficient in this economy? The answer is supposed to be 3/5 but I end up getting 3/10 ...
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1answer
48 views

Effect on GINI of eliminating poverty in China

China eliminated extreme urban poverty this year and is on schedule to eliminate it in the rest of the country by the end of 2020. How do I calculate the approximate impact of this change for China'...
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67 views

Income Inequality as an indicator of wealth

My employer has assigned me the project of trying to understand where our current and potential International Private Banking clients are, and where they are moving to. To understand this, we are ...
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65 views

“Fairness” exists or not in the real world [closed]

What is "Fairness"? Does "Fairness" exist in the world? Thanks, Marx
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642 views

Are there data for the evolution of global economic inequality

Please excuse my ignorance of economics. I recently learned about the Gini-Coefficient as a measure of the economic inequality in a country. I have since seen several plots of this coefficient over ...
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Hypothetical question: Percentage change in Federal income tax revenue in United States if Gini Index = 0?

Gini index = 0 refers to an economy where gross income has been redistributed so that all income earners in the United States received the same income, equal to the most current measure of the mean (...
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428 views

Reconciling low wages with high technology and high education

This is one example of many recent doom storied prognosticating that the "millennial" generation will be the first in (recent) history to experience lower incomes than their predecessors—at least in ...
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2answers
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When a country collects data for calculating the Gini index, do they usually neglect single household?

OECD data for South Korea is based on the numbers provided by Statistics Korea, which does not count single household family income data in their statistics. I am just curious that neglecting single ...
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234 views

Who really benefits from economic growth?

In recent social protests, I have heard the claim that the economic growth benefits only the rich: they become richer while most people become poorer. To check whether this claim is realistic, I ...