Answer to Question #152239 in Microeconomics for Misha

Question

What does each inequality coefficient measure, conceptually? Make sure to compare the definitions of both (3)

Answer 1

$$Solution$$

Economic inequality is the discrepancy in wealth or income in a given society and this is monitored to access the impact of policy changes in different jurisdictions.

One of the most used inequality coefficient measure used is the Gini coefficient.

 The Gini coefficient is very useful and commonly used. To understand this, the economic relationship between the wages of the people and the full share of capital is first analyzed. The connection is explained by the Lorenz curve, where the relative proportion of wealth increases by an extremely large factor as people's incomes rise.