1. Measuring Regional Disparities

2. Measuring income disparities We need to quantify whether incomes in a region are moving closer together or further apart. When there are many regions, some moving one way, and some another, eyeballing diagrams is inadequate. Some measures of income more together more quickly than others.

6. Personal Disposable Income: moving together

7. Market income: more dispersed than disposable income

8. Gross Domestic Product: The total market value of all final goods and services produced in an economy in a year. It measures the value of all the goods and services produced in a nation, regardless of whether a local person or a non-resident receives it.

9. Gross National Product: The aggregate final output of citizens and businesses of an economy in a year. –More simply: it is the income earned by the residents of a region, whether from production in the region or elsewhere.

10. GDP AND GNP COMPARED Newfoundland’s GDP (more properly PDP) includes the profits earned from its oil but paid to non-residents. Newfoundland’s GNP (PNP) excludes profits on oil production paid to non- residents, but includes the income a Newfoundlander collects on investments in corporations operating in Alberta or the U.S.

11. Other income definitions Personal Income: Income paid to persons. –Includes transfers payments –Excludes undistributed corporate profits Personal Disposable Income: Personal income net of income taxes, CPP and EI deductions. There are less disparities in these, since we use transfers and taxes to equalize incomes.

12. More income definitions Earned Income: Income earned from economic activity. –Includes Wages, salaries, military pay, farm income and income from unincorporated business Market Income: Income from market activity. –Earned income plus income from miscellaneous investments, such as bonds.

13. Measuring the degree if difference Index of Variation. –It measures an average of the difference if each variable from the mean, then divides the average by the mean. The result is a measure that is independent of the units chosen. –It is the standard deviation of a set of numbers divided by the mean of those numbers.

14. Calculating the index of variation –Take the difference between Y i and the mean Y, and then square it. Add the squares up for each region, divide by the number of regions, and take the square root of the result. That gives you the standard deviation. –Then divide the standard deviation by the mean Y. The result is the index of variation.

15. YY- YmeanDiff. squared A12020400 B11010100 C 00 D90-10100 E80-20400 Sum sqroot gives stdevIndex of variation Mean1000 1000 /5= 20014.142 14.142/ 1000.141 Example

16. Index of variation: independent of scale YY- YmeanDiff. squared A24040400 B22020100 C20000 D180-20100 E160-40400 Sum sqroot gives stdevIndex of variation Mean2000 4000 /5= 80028.284 28.28/ 2000.141

17. Convergence of Incomes

18. Employment