In the previous article we talked about the Gini coefficient, this coefficient uses the Lorenz curve to indicate the income inequality in a population, and it is the most widely used measure of inequality in the academy. However, other measures can give us a better idea of the inequality in a country by measuring the data in a different way, such as the Income Quintile Ratio.
The Income Quintile Ratio (IQR) is the standard used by the United Nations Development Programme (UNDP) to measure inequality. How does it work?
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Economic inequality is defined as the difference of several measures of economic welfare among individuals in a population. Inequality tends to have several negative effects on a society such as the loss of social cohesion, rising crime rates, and reduced economic growth. So, how do we solve it?
In order to solve a problem we first have to analyze it, and the most used measurement tool for inequality is the Gini coefficient, created in 1912 by the Italian statistician Corrado Gini. Let’s see how it works.
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The GDP of a country tells us the size of its market and its importance in the world economy. However, it tells us little about how people live in that country. For this, we have to use indicators of quality of life that give us an idea of the situation of the average person in a given country. The most basic and easily calculated indicator of all is GDP per capita.
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