1. Measure distribution of thing your interested in. E.g.  Share of largest firms in an oligopolistic industry, e.g share of top eight, sixteen etc  distribution of income in an economy –Work with example of Distribution of Income Measure distribution of thing your interested in. E.g.  Share of largest firms in an oligopolistic industry, e.g share of top eight, sixteen etc  distribution of income in an economy –Work with example of Distribution of Income Lorenz Curve and Gini Coefficient Ch 10

2. Lorenz curve O 100 O 20 40 6080 20 40 60 80 Line of complete equality Percentage share of national income (cumulative) Percentage of population

3. INEQUALITY AND POVERTY Distribution in the UK – –size distribution – –Looking at Quintile Groups:   Divide population into 5 equal groups (by number of people) Distribution in the UK – –size distribution – –Looking at Quintile Groups:   Divide population into 5 equal groups (by number of people)

4. Size distribution of UK income by quintile group of households: 1997/8 Bottom 20% Next 20% Middle 20% Next 20% Top 20% 15% 25% 51% 7% 2% Bottom 20% Next 20% Middle 20% Next 20% Top 20% 11% 16% 22% 44% 7% Income before taxes and benefits Income after taxes and benefits

5. O 100 O 20 40 6080 20 40 60 80 Line of complete equality Lorenz curve Percentage share of national income (cumulative) Percentage of population Lorenz curve

6. Lorenz curve and Gini coefficient O 100 O 20 40 6080 20 40 60 80 Line of complete equality Lorenz curve A B Percentage share of national income (cumulative) Percentage of population Gini coefficient = A / (A + B)

7. O 100 O 20 40 6080 20 40 60 80 Line of complete equality Lorenz curve Percentage share of national income (cumulative) Percentage of population Lorenz curve

8. O 100 O 20 40 6080 20 40 60 80 Line of complete equality Lorenz curve Percentage share of national income (cumulative) Percentage of population Lorenz curve