Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 5 Poverty, Inequality, and...

Chapter 5

Poverty, Inequality, and Development

The Growth Controversy: Seven Critical Questions

What is the extent of relative inequality, and how is this related to the extent of poverty?

Who are the poor? Who benefits from economic growth? Does rapid growth necessarily cause

greater income inequality? Do the poor benefit from growth?

The Growth Controversy: Seven Critical Questions

Are high levels of inequality always bad? What policies can reduce poverty?

Measuring Inequality and Poverty

Measuring Inequality– Size distributions

Table 5.1

Measuring Inequality– size distributions– Lorenz curves

Figure 5.1

Figure 5.2

Measuring Inequality– Size distributions (see Table 5.1)– Lorenz curves (see Figures 5.1 and 5.2)– Gini coefficients and aggregate measures of

inequality (see Figures 5.3 and 5.4)

Figure 5.3

Figure 5.4

Measuring Inequality– Size distributions– Lorenz curves– Gini coefficients and aggregate measures of

inequality– Functional distributions (see Figure 5.5)

Figure 5.5

Measuring Absolute Poverty– Headcount Index– Total poverty gap

– Where Yp is the absolute poverty line

– Yi is income of person i

TPG Y Yp ii

Measuring Absolute Poverty– Average poverty gap

– Where H is number of persons– TPG is total poverty gap

APGTPG

Figure 5.6

Measuring Absolute Poverty– Foster-Greer-Thorbecke measure

Measuring Inequality and Poverty:

Measuring Absolute Poverty– Total poverty gap– Average poverty gap– Foster-Greer-Thorbecke measure– The Human Poverty Index

Poverty, Inequality, and Social Welfare

What’s so bad about inequality?

What is so bad about inequality?

Inequality creates inefficiency:– Due to market imperfections– Due to increased conflict

Inequality is unjust

Inequality and Growth: Causal Mechanisms

Inequality Lower investment by the poor slow growth Lower education (credit market private,

political process public) slow growth Increased property crime slow growth Political Instability insecure Property Rights

slow growth Difficulty of consensus political inflexibility

slow growth

What’s so bad about inequality? Kuznets’s inverted-U hypothesis (see Figure

5.10 and Tables 5.2 and 5.3) and recent evidence

Figure 5.10

Table 5.2

Table 5.3

Figure 5.11

Figure 5.12

Inequality and Growth: Evidence

Source: Birdsall and Londoño (1997)

What’s so bad about inequality? Kuznets’s inverted-U hypothesis (see Figure 5.10

and Tables 5.2 and 5.3) and recent evidence Dualistic development and shifting Lorenz curves:

some stylized typologies– Traditional sector enrichment (see Figure 5.7)– Modern sector enrichment (see Figure 5.8)– Modern sector enlargement (see Figure 5.9)

What’s so bad about inequality? Kuznets’s inverted-U hypothesis Dualistic development and shifting Lorenz

curves: some stylized typologies Types of Growth and inequality (see Figure

Figure 5.7

Figure 5.8

Figure 5.9

Figure 5.13

Absolute Poverty: Extent and Magnitude

Poverty: some progress

Figure 5.14

Figure 5.15

Figure 5.16

Table 5.4

Table 5.4 (cont’d)

Absolute Poverty: Extent and Magnitude

Poverty: some progress Growth and poverty (see Figures 5.17a and

5.17b)

Figure 5.17 (a)

Figure 5.17 (b)

Economic Characteristics of Poverty Groups

Rural Poverty (see Table 5.5)

Table 5.5

Economic Characteristics of Poverty Groups

Rural poverty Women and poverty Ethnic minorities, indigenous populations,

and poverty

Table 5.6

The Range of Policy Options: Some Basic Considerations

Areas of intervention Policy options

– Changing relative factor prices– Progressive redistribution of asset ownership– Progressive taxation– Transfer payments and public provision of

goods and services

Figure 5.18

The Range of Policy Options: Some Basic Considerations

Areas of intervention Policy options the need for a ‘package’ of policies

Concepts for Review

Absolute poverty Asset ownership Character of economic

growth Deciles Disposable income Elasticity of factor

substitution

Factor-price distortions Factor share

distribution of income Factors of production Foster-Greer-

Thorbecke (FGT) index Functional distribution

of income

Concepts for Review (cont’d)

Gini coefficient Headcount index Human Poverty Index Income inequality Indirect taxes Kuznets curve Land reform

Lorenz curve Neoclassical price-

incentive model Personal distribution of

income Poverty gap Progressive income

Concepts for Review (cont’d)

Public consumption Quintiles Redistribution policies Regressive tax

Size distribution of income

Subsidy Workfare programs

Figure A5.1

Table A5.2

Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 5 Poverty, Inequality, and...

Documents

Transcript of Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 5 Poverty, Inequality, and...

Addison-Wesley 2001. Distributed File Systems

Chapter 13 Income Inequality. Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 13-2.

Agile Software Development Alistair Cockburn Addison Wesley.

Poverty, Inequality, and Development - Universitas …mizu.lecture.ub.ac.id/files/2015/09/5.-Ketimpangan-dan...Copyright © 2012 Pearson Addison-Wesley. All rights reserved. Chapter

© 2010 Pearson Addison-Wesley CompetenciaPerfecta.

Scott Foresman-Addison Wesley Mathematics … Public Schools Final Curriculum Guide - Grade 1 Scott Foresman – Addison Wesley Mathematics Final Guide Scott Foresman-Addison Wesley

Addison Wesley - Delphi 6 - 2001 - (by Laxxuss)

Addison wesley - stl tutorial and reference guide

Addison wesley professional-dojo_using_the_dojo_java_script_library_to_build_ajax_applications_2009

Addison wesley -_embedded_c

Chapter 4: Atomic Structure Addison Wesley Chemistry.

Addison wesley usb system architecture (usb 2.0)

PTG Professional Addison Wesley, Prentice Hall PTR

©2000 Addison Wesley A basic ARM memory system. ©2000 Addison Wesley Simple ARM memory system control logic.

SCOTT FORESMAN ADDISON WESLEY PRENTICE HALLassets.pearsonschool.com/.../200750/M_ScopeSeqPreK-8_small_4967… · Scope and Sequence Grades Pre-K–8 SCOTT FORESMAN ADDISON WESLEY

Poverty, Inequality, and Developmentmizu.lecture.ub.ac.id/.../Bab-5-Kemiskinan-dan-Ketimpangan-Todaro.pdfCopyright © 2012 Pearson Addison-Wesley. All rights reserved. 5-17 The Multidimensional

Addison Wesley

5 . Addison Wesley - Mathematical Analysis _ Apostol

Addison Wesley is an imprint of

Addison Wesley - Embedded C