# 14.4 Income inequality: measurement and causes  (Page 2/20)

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U.S. income distribution by quintile appears in [link] . In 2011, for example, the bottom quintile of the income distribution received 3.2% of income; the second quintile received 8.4%; the third quintile, 14.3%; the fourth quintile, 23.0%; and the top quintile, 51.14%. The final column of [link] shows what share of income went to households in the top 5% of the income distribution: 22.3% in 2011. Over time, from the late 1960s to the early 1980s, the top fifth of the income distribution typically received between about 43% to 44% of all income. The share of income that the top fifth received then begins to rise. According to the Census Bureau, much of this increase in the share of income going to the top fifth can be traced to an increase in the share of income going to the top 5%. The quintile measure shows how income inequality has increased in recent decades.

Share of aggregate income received by each fifth and top 5% of households, 1967–2013
Year Lowest Quintile Second Quintile Third Quintile Fourth Quintile Highest Quintile Top 5%
1967 4.0 10.8 17.3 24.2 43.6 17.2
1970 4.1 10.8 17.4 24.5 43.3 16.6
1975 4.3 10.4 17.0 24.7 43.6 16.5
1980 4.2 10.2 16.8 24.7 44.1 16.5
1985 3.9 9.8 16.2 24.4 45.6 17.6
1990 3.8 9.6 15.9 24.0 46.6 18.5
1995 3.7 9.1 15.2 23.3 48.7 21.0
2000 3.6 8.9 14.8 23.0 49.8 22.1
2005 3.4 8.6 14.6 23.0 50.4 22.2
2010 3.3 8.5 14.6 23.4 50.3 21.3
2013 3.2 8.4 14.4 23.0 51 22.2

It can also be useful to divide the income distribution in ways other than quintiles; for example, into tenths or even into percentiles (that is, hundredths). A more detailed breakdown can provide additional insights. For example, the last column of [link] shows the income received by the top 5% percent of the income distribution. Between 1980 and 2013, the share of income going to the top 5% increased by 5.7 percentage points (from 16.5% in 1980 to 22.2% in 2013). From 1980 to 2013 the share of income going to the top quintile increased by 7.0 percentage points (from 44.1% in 1980 to 51% in 2013). Thus, the top 20% of householders (the fifth quintile) received over half (51%) of all the income in the United States in 2013.

## Lorenz curve

The data on income inequality can be presented in various ways. For example, you could draw a bar graph that showed the share of income going to each fifth of the income distribution. [link] presents an alternative way of showing inequality data in what is called a Lorenz curve    . The Lorenz curve shows the cumulative share of population on the horizontal axis and the cumulative percentage of total income received on the vertical axis.

Every Lorenz curve diagram begins with a line sloping up at a 45-degree angle, shown as a dashed line in [link] . The points along this line show what perfect equality of the income distribution looks like. It would mean, for example, that the bottom 20% of the income distribution receives 20% of the total income, the bottom 40% gets 40% of total income, and so on. The other lines reflect actual U.S. data on inequality for 1980 and 2011.

Leo Robinson's definition
how is equilibrium defined in financial markets?
the concept of it
DALOM
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what is determination of national income?
economic growth
Rukaiya
stock of capital
Rukaiya
we're RBI keep money with them
Anil
Y =C+l
Favour
evaluate the success affirmative action as one of south Africa's redress method
what is market equilibrium
it is a situation in which the supply of an item is exactly equal to it dd .
Ssmith
inder wat condition shld a firm stop production in both short n lungrun ?
Ssmith
what is 2nd degree price discrimination?
Ssmith
what is quantity
Tettey
what is quantity2
An indefinite amount of something.
explorer
what is demand
in ordinary sense demand means desire
Khalid
demand in economics means both willingness as well as the ability to purchase a commodity by paying a price an also its actuall purchase
Khalid
Khalid
demand refers to the various quantity of goods and services that consumers are willing and able to purchase at a particular period of time all other things been equal
Dela
The amount of a good or service that consumers are willing to buy at a particular price.
explorer
what is cost pull inflation?
oru
what is utility
oru
what is cost pull inflation?
oru
demand is economic principle referring to a consumer's desire and willingness to pay a price for a specific or service..
Babakura
utility is the among of certisfaction driving from using a comundity
Anas
pull cost of inflation hight population unemployment to some of The country members poor government system
Anas
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Lukong
state the second law of demand and supply
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Rukundo
mention and explain two Bank I financial institutions and two non baking financial institutions
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Demand-pull inflation is asserted to arise when aggregate demandin an economy outpaces aggregate supply. It involvesinflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve.
kevin
Perfectly elastic demand
this is a form of demand where goods are demanded at a constant price
Rukundo
what inelastic demanding
Koire
demand of any good demanded more after a certain period. if a commodity prices may high and scarcity of that resources.
Anil
cannot demand more
Anil
what is cross-elasticity of demand
cross elasticity of demand is an economic concept that measures the responsiveness in the quantity demand of one good when a change in price takes place in other good
Mallekha
this is responsiveness quantity demanded keeping other factors constant
Rukundo
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conditions of perfect market
CONDITIONS OF PERFECT MARKET: 1. Perfect competition(PC): no increasing returns, many buyers and sellers, all are price takers, not prices makers. 2. Perfect Information (PI): buyers and sellers know all they need to know about what they are buying and selling to make the right decisions.
Mallekha
3. Complete Markets(CM): no externalities or public goods, no transactions costs, "thick" markets.
Mallekha
nice contributor
Mohammed
A numerous downsized market that does not meet standards.
LaTasha
A Perfect Market is a numerous downsized market that does not meet standards.
LaTasha
what is a market
is place where buyers and sellers met together for the purpose of buying and selling of good and services
Babakura