Calculation of Gini coefficient
The Gini coefficient is a widely used measure of income inequality. Calculating the Gini coefficient involves analyzing the distribution of income or wealth within a population. It ranges from 0 to 1, where 0 represents perfect equality, and 1 signifies extreme inequality. The formula for calculating the Gini coefficient involves plotting cumulative income against cumulative population on a Lorenz curve. The larger the area between the Lorenz curve and the line of perfect equality, the higher the Gini coefficient, indicating greater inequality. Understanding and calculating the Gini coefficient is crucial for assessing and addressing income disparities within societies.
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Calculation of Atkinson index
The calculation of the Atkinson index is a method used to measure income inequality within a given population. It provides valuable insights into the distribution of income and the disparity between different groups. The Atkinson index takes into account both the unequal distribution of income and society's level of aversion to inequality. By incorporating these factors, the index offers a comprehensive assessment of inequality. This calculation involves a mathematical formula that considers the income shares of individuals at different percentile levels. By analyzing the Atkinson index, policymakers and researchers can gain a deeper understanding of income disparities and work towards implementing policies to address them.
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