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- Officials in fluxemburg are concerned about the current level of income inequality in their country, where the highest quintile of families currently earns 60% of the country's income. The central government has income information on its citizenry, and they want you to help them interpret the data from a 15-year period. The following table gives data on how families have moved between income quintiles between the years shown. ral in the missing values in the distribution table for familles in Fluxemburg; then use the information in the table to answer the following questions. Income Distribution in 2007 (Percent) Third Quintile Fourth Quintile Lowest Quintile Income Distribution in 1992 Highest Quintile Second Quintile Highest Quintile Second Quintile Third Quintile Fourth Quintile Lowest Quintile 65 12 13 51 18 8 12 -0* 52 Looking at families in the lowest quintile of income in 1992 (bottom row), you can report that higher quintile of income distribution by 2007. 6 10 16 57 11 5 14 66…Qn 1. According to the News Wire “Inequality,” what is the average per capita income innations where the highest-income decile gets (a) over 45 percent of totalincome? (b) less than 30 percent of total income?(SW 7.10) Show that the two alternative formulas below for the homoscedasticity-only F-statistic are equivalent. F = (SSRrestricted − SSRunrestricted) /q SSRunrestricted/ (n − kunrestricted − 1) (equation 7.13 in SW) F = R2 unrestricted − R2 restricted /q (1 − R2 unrestricted) / (n − kunrestricted − 1) (equation 7.14 in SW)
- A Gini ratio of 0.99999 would indicate that income distribution is: Group of answer choices almost perfectly equal perfectly equal almost perfectly unequal highly variableN Lorenz curve, shown as the sum of areas V+W+X+Y+Z % of Income C W V % of Population Use the sliders in the interactive tool to illustrate the following income distribution: % of Population 0 40 60 80 100 20 % of Income 4 12 26 46 100A group of 10 people have the following annual incomes: $55,000, $30,000, $15,000, $20,000, $35,000, $80,000, $40,000, $45,000, $30,000, $50,000. Calculate the share of total income each quintile of this income distribution received. Do the top and bottom quintiles in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution for 2005?
- 2. Draw a complete and dearly labeled Lorenz Curve using the information below. Lowest 2nd 3rd 5th Quantile Quantile Quantile Quantile Quantile 3.6% 8.9% 14.8% 23% 49.8%Given the income distributions (1; 2; 2; 5; 5; 5; 7; 11; 11; 12; 20; 21; 22; 24); (2; 3; 3; 4; 4; 5; 7; 7; 11; 11; 12; 20; 21; 24); And a poverty line of z = 6, calculate the Sen poverty measure. Explain the values obtained for the two distributions.Question 20 - A group of eight people have the following annual incomes: $10,000; $9,000: $15,700; $5,000; $6,500; $13,500; S12,000; and $8,300. Calculate the share of total income that people in the fourth quartile receive from this incorne distribution. Enter your answer in the box below rounding to one decimal place. Answer
- A Lorenz curve is used to study income distributions (see graph). If x is the cumulative percentage of income recipients, ordered from poorest to richest, and Y is the cumulative percentage of income, then equality of income distribution is given by the line Y=X. Suppose the real distribution is given by the Lorenz curve defined by: 20 y =x? +x The Gini coefficient (G) measures the degree of deviation from equality Y=X for a specific Lorenz curve y is given by: G= A/(A+B). Determine G Areas produced by the Lorenz curve B Curve `Lorenz Population EntryIf the area between the diagonal line of absolute equality and the Lorenz curve is greater for China than for the United States, we can conclude that the Distribution of income in China is less equal than in the United States. Relative distributions of income in the two countries are the same. O Distribution of income in China is as equal as in the United States. O Distribution of income in China is closer to being equal than in the United States.Given standard deviation of two per capita incomes and the percentiles per capita income, what can you conclude about income inequality in America? Standard deviation Income 1: 12,000 Standard deviation Income 2: 13,000 Percentile 0.1 20000 0.2 22000 0.3 24000 0.4 26000 0.5 28000 0.6 30000 0.7 32000 0.8 38000 0.9 40000