Calculating Income Inequality in a Small Economy
Using the method where the Gini coefficient is calculated as half of the average absolute difference in income between all pairs relative to the mean income, calculate the Gini coefficient for the economy described below.
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Calculating Income Inequality in a Small Economy
Consider a small economy with three individuals who have annual incomes of $10, $20, and $50. Using the formula based on the average difference between all pairs of individuals, what is the Gini coefficient for this economy?
Consider a population where income is unequally distributed. If a fixed amount of money is given to every single individual (for example, as a universal basic income payment), the Gini coefficient of the new, higher income distribution will be lower than the original Gini coefficient.
Scale Invariance of an Inequality Measure