Social indicators that reflect different aspects of well-being.

25. Absolute and relative income.
Relative income hypothesis states that the satisfaction (or utility) an individual derives from a given consumption level depends on its relative magnitude in the society (e.g., relative to the average consumption) rather than its absolute level. It is based on a postulate that has long been acknowledged by psychologists and sociologists, namely that individuals care about status. In economics, relative income hypothesis is attributed to James Duesenberry’s theory of consumption (1949), who emphasized the importance of relative standings in determining consumption and savings patterns over time.

26. Monetary income in the assessment of living standards of the population.

The level of income

Income - 1. the amount of money or its equivalent received during a period of time in exchange

for labor or services, from the sale of goods or property, or as profit from financial investments;

2. the amount of monetary or other returns, either earned or unearned, accruing over a given

period of time.

Money income includes amounts reported separately for wage or salary income; net selfemployment income; interest, dividends, or net rental or royalty income or income from estates

and trusts; public assistance or welfare payments; retirement, disability pensions; and all other

income.

27. Sources of the information about income and charges of the population. The main element of well-being is the level and differentation incomes of the population. The level of income is the result of development of the economy and the availability of natural resources.
Income differentials is under the influence of economic, demographic and social factors and is measured by the ratio of the material well-being level of 10 per cent of the most well-off and 10 per cent of the most disadvantaged groups of the population.
the first devotes primary attention to identifying the poor and needy, while the second is more concerned with monitoring equal access toresources among the population at large.
hdi index.

28. Types of inequality. International inequality and its causes. There are many types of inequality– economics, status, political power, sex and gender, sexual orientation, race, and ethnicity.

International inequality is inequality between countries. Economic differences between rich and poor countries are considerable.

The first cause refers to inter-country inequality in terms of per capita GDP. This effectively treats each country as an individual so that the relevant inequality is that of the distribution of Per capita GDP among countries.

The second cause is that of international inequality. This attaches due importance to the population size of a country but assumes that all individuals in a given country receives an income equal to the per capita GDP of that country. The third measure is that of inequality of world income distribution.

The relevant notion of income here is that of personal disposable income.

The world distribution can in principle be obtained by combining observations either on summary indicators of distributional inequality in individual countries or on actual incomes received by individuals or groups of individuals in each of the countries of the world.

29. Quantitative characteristics of inequality: the Gini coefficient, Lorenz curves.

The Gini coefficient is a measure of statistical dispersion most prominently used as a measure of inequality of income distribution or inequality of wealth distribution. It is defined as a ratio with values between 0 and 1: A low Gini coefficient indicates more equal income or wealth distribution, while a high Gini coefficient indicates more unequal distribution. 0 corresponds to perfect equality (everyone having exactly the same income) and 1 corresponds to perfect inequality (where one person has all the income, while everyone else has zero income). The Gini coefficient requires that no one have a negative net income or wealth. Worldwide, Gini coefficients range from approximately 0.232 in Denmark to 0.707 in Namibia.

The Lorenz curve is a graphical representation of the cumulative distribution function of a probability distribution; it is a graph showing the proportion of the distribution assumed by the bottom "y"% of the values. It is often used to represent income distribution, where it shows for the bottom "x"% of households, what percentage "y"% of the total income they have. The percentage of households is plotted on the "x"-axis, the percentage of income on the "y"-axis. It can also be used to show distribution of assets. In such use, many economists consider it to be a measure of social inequality. It was developed by Max O. Lorenz in 1905 for representing income distribution.

Date: 2015-12-24; view: 599