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quantitative skills

Measuring income inequality

In the Question and Answer column on pp. 30–33, David Horner discusses income inequality, and how to tackle exam questions dealing with this topic. How can we measure inequality if we want to track how it changes over time, or how it differs between countries? Peter Smith takes a look

Data are important to economists. There may be arguments for and against income inequality in a society, as David Horner suggests. However, unless we can find a way of measuring the extent to which income is distributed unequally, how do we know if inequality is getting better or worse? And how do we compare inequality in different societies? If we are going to monitor the degree of inequality in a country, we need to be able to find a quantifiable way of representing it.

How can we measure inequality?

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The economics of natural disasters

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The economics of thrift and stockpiling

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