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Intermediate Microeconomics


8. Income Inequality


Income inequality has increased in the U.S. (and many other countries) over the last 30 years or so. As a result, academics and policymakers have debated the pros and cons of increased income equality and what, if anything, should be done about it. Because the analysis of income inequality is mostly empirical, the Pencasts for this topic focus on how one might measure inequality using a Lorenz Curve and calcluating a Gini Coefficient.


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Perfect Equality Lorenz Curve

This Pencast illustrates a Lorenz curve in which income is distributed equally throughout the population. [Play Pencast]


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Lorenz Curve with an Unequal Distribution of Income

This Pencast illustrates a Lorenz curve in which income is distributed unequally throughout the population. [Play Pencast]


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Gini Coeffiicent

This Pencast shows how to use actual and perfect-equality Lorenz curves to calculate the Gini Coefficient, which is a measure of inequality. [Play Pencast]


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Increase in Income Inequality

This Pencast shows an outward shift (down and to the right) of a Lorenz curve, which would indicate an increase in income inequality. [Play Pencast]


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