Microeconomics › Section O · Poverty and economic inequality › Topic O.4
Measuring income inequality and its causes
Poverty counts the people below a line; inequality describes how the whole income pie is shared. Economists measure that sharing with quintiles, the Lorenz curve and the Gini coefficient, and then use supply and demand to ask why US inequality has risen since about 1980.
In this topic
- Efficiency and equity
- Quintiles: slicing the pie
- The Lorenz curve
- Worked example: from shares to a Gini
- The Gini coefficient
- Income, wealth and snapshots
- Cause one: changing households
- Cause two: a shift in wages
- Worked example: the race between education and technology
- Other forces at work
- Common mistakes to avoid
- Key takeaways
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