Tag Archives: inequalities

Readings on Inequalities

Here are some reading for the course on inequalities,

Inequality, Poverty and Welfare

For the fourth cours on Inequalities, we will get back on the quantile regression, and discuss welfare functions as well as poverty indices. Slides are now online

To illustrate, we will use the following datasets

uk88 <- read.csv("http://www.vcharite.univ-mrs.fr/pp/lubrano/cours/fes88.csv",sep=";",header=FALSE)$V1
uk92 <- read.csv("http://www.vcharite.univ-mrs.fr/pp/lubrano/cours/fes92.csv",sep=";",header=FALSE)$V1
uk96 <- read.csv("http://www.vcharite.univ-mrs.fr/pp/lubrano/cours/fes96.csv",sep=";",header=FALSE)$V1
cpi <- c(421.7, 546.4, 602.4)
y88 <- uk88/cpi[1]
y92 <- uk92/cpi[2]
y96 <- uk96/cpi[3]

and for the part on applications of quantile regression

salary <- read.table("http://data.princeton.edu/wws509/datasets/salary.dat",header=TRUE)

Modeling Incomes and Inequalities

Last week, in our Inequality course, we’ve been looking at data. We started with some simulated data, only a few of them

> library("ineq")
> load(url("http://freakonometrics.free.fr/income_5.RData"))
> (income=sort(income))
[1]  19233  23707  53297  61667 218662

How could we say that there is inequality in this sample? If we look at the wealth owned by the poorest, the poorest person (1 out of 5) owns 5% of the wealth; the bottom two (2 out of 5) own 11%, etc

> income[1]/sum(income)
[1] 0.05107471
> sum(income[1:2])/sum(income)
[1] 0.1140305
> sum(income[1:3])/sum(income)
[1] 0.2555648
> sum(income[1:4])/sum(income)
[1] 0.4193262

If we plot those values, we get Lorenz curve

> plot(Lc(income))
> points(c(0:5)/5,c(0,cumsum(income)/sum(income)),pch=19,col="blue")

Continue reading Modeling Incomes and Inequalities