Questions tagged [inequality]

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

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30 views

Income/Wealth Inequality; Why does it matter?

I have attempted to answer this question on my own through reading books, blog, and other economic pieces of literature but they all fail to articulate why wealth or income disparities matter. Now ...
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35 views

Combine Gini index with GNI/capita (PPP) to produce an indicator which gives the same weight to low percentile incomes as to high percentile incomes

Consider the attached charts, which illustrate that low-inequality Country A can have both a lower average income and higher average log income than high-inequality Country B. This sparked my interest ...
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1answer
30 views

Is Buy Nothing Day a classist protest of Black Friday?

I hope this isn't off topic, it seems specifically economic to me even though it probably intersects with other fields of study. Black Friday is seen as an iconic hallmark of consumerism, and Buy ...
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1answer
26 views

Are there any effective research efforts into combating wealth inequality?

There seems to be no "correct" answer in combating wealth inequality; however, we should attempt to use different methods to combat inequality in cities, then counties, then states, then countries. ...
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1answer
59 views

Kuhn Tucker Maximization

I have to maximize following expected utility function using Kuhn tucker conditions - Since expected utility function are increasing $C_{1,t}$ and $C_{2,t}$ so constraints (i) and (ii) will hold with ...
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Data for income distributions

Knowing the average income per capita or the median income is a rather poor economical indicator of a country, even when given in PPP\$. Knowing the (dimension-less) Gini index is somehow better, but ...
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30 views

Deflation and Wealth Inequality

I've just seen an article where the author states that deflation has the possibility of reducing wealth inequality. His rationale is as follows: When deflation occurs, the prices of assets falls (he ...
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25 views

What impact does deficit spending have on economic inequality?

Taxation schemes can be classified as progressive (the tax rate is higher for higher income brackets), regressive (the tax rate is lower for higher income brackets), or neutral (the tax rate is the ...
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21 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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1answer
38 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
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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1answer
29 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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1answer
73 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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2answers
135 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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1answer
68 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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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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2answers
86 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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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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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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1answer
179 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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56 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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4answers
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Has the world become poorer?

This question is not backed by serious economic research but mainly by a very simple attempt to look at how the world economy has changed. I am asking whether and why the world has, over the past 50 ...
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0answers
44 views

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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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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2answers
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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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4answers
132 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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5answers
449 views

Have automation and technological advance been shown to have a positive impact on society and the economy or a negative one?

My friends and I, 2 of which are computer science majors think it is worse because is humans can't work and thus afford necessities, how will they survive? The definition of automation: the use of ...
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3answers
168 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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2answers
5k views

Where can I find data on income and social mobility over time? How far back is data available?

I'm interested in income and social mobility. I understand that Piketty's research deals with the the distribution of income over a long time period. I have also seen some of Chetty and Saez's ...
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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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55 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
427 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
53 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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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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0answers
46 views

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
317 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
51 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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1answer
99 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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2answers
204 views

Is worsening wealth inequality intrinsic to Capitalism?

I am but a humble lay person, but I have a question. I've been thinking about wealth inequality and the structure of capitalism. It seems to me that the pay rate for workers accumulates in a linear ...
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562 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
498 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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4answers
328 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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2answers
172 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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2answers
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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 ...