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C Alculus in Context #5
Math 113, Chapters 5 & 6
How does our understanding of integration and the Fundamental Theorem of
Calculus allow us to compare income inequality?
The Gini index is a statistical measure of income distribution. It ranges from 0 (or 0%) for perfect equality to 1
(or 100%) for perfect inequality. Source:
https://data.worldbank.org/indicator/SI.POV.GINI?view=map
A country where every
1. Perfect Equality
2. Unequal
3. More Unequal
4. Total Inequality
100%
resident has the same
income would have a Gini
index of 0.
G1=0
ZZ00
G2>0
G3>G2
G4=1
A country in which one
resident earned all the
0%
0%
100%
0%
100% 0%
100% I
Cumulative
%Population
Cumulative
%Population
Cumulative 100% 0%
%Population
Cumulative
%Population
income, while everyone
else earned nothing, would have a Gini index of 1.
Final shaded Area then Mult by 2
Lorenz Curve - Ukraine 2020
The Gini index is defined to be two times the area between
the line of perfect equality (y = x) and the Lorenz curve. (The
Lorenz curve shows the percentage of income held by each
percentile of the country's population. As an example, the
Lorenz curve would plot a point at (50, 20) if the bottom 50%
of the population held 20% of the country's income.)
y = 1.5625x5 -2.5781x + 1.3438x³
+0.2406x² + 0.4313x
1
0.8
<-Ukraine -Line of Equality
0.6
0.4
0.2
Talks were underway for Ukraine to join the European Union
an alliance which currently includes the countries of Austria,
Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy,
Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland,
Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
0
0
0.4
0.8
1
0.2
0.6
Cumulative Percentage of the Population
Area = 112
We are going to compare the income distribution of Ukraine with that of Poland, a country in the EU which is
geographically close to Ukraine.
1. Above is a plot of the line of equality and the Lorenz curve for Ukraine in 2020. Shade the area we need to
find first so that we can calculate the Gini index. Then, write an expression for THIS AREA that includes a
definite integral.
2. Use the integral expression you wrote in #1 and the Fundamental Theorem of Calculus to find the Gini
index for Ukraine in the year 2020. Show the substitutions necessary, but use fnint to do the calculation.
Cumulative Wealth
Transcribed Image Text:C Alculus in Context #5 Math 113, Chapters 5 & 6 How does our understanding of integration and the Fundamental Theorem of Calculus allow us to compare income inequality? The Gini index is a statistical measure of income distribution. It ranges from 0 (or 0%) for perfect equality to 1 (or 100%) for perfect inequality. Source: https://data.worldbank.org/indicator/SI.POV.GINI?view=map A country where every 1. Perfect Equality 2. Unequal 3. More Unequal 4. Total Inequality 100% resident has the same income would have a Gini index of 0. G1=0 ZZ00 G2>0 G3>G2 G4=1 A country in which one resident earned all the 0% 0% 100% 0% 100% 0% 100% I Cumulative %Population Cumulative %Population Cumulative 100% 0% %Population Cumulative %Population income, while everyone else earned nothing, would have a Gini index of 1. Final shaded Area then Mult by 2 Lorenz Curve - Ukraine 2020 The Gini index is defined to be two times the area between the line of perfect equality (y = x) and the Lorenz curve. (The Lorenz curve shows the percentage of income held by each percentile of the country's population. As an example, the Lorenz curve would plot a point at (50, 20) if the bottom 50% of the population held 20% of the country's income.) y = 1.5625x5 -2.5781x + 1.3438x³ +0.2406x² + 0.4313x 1 0.8 <-Ukraine -Line of Equality 0.6 0.4 0.2 Talks were underway for Ukraine to join the European Union an alliance which currently includes the countries of Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. 0 0 0.4 0.8 1 0.2 0.6 Cumulative Percentage of the Population Area = 112 We are going to compare the income distribution of Ukraine with that of Poland, a country in the EU which is geographically close to Ukraine. 1. Above is a plot of the line of equality and the Lorenz curve for Ukraine in 2020. Shade the area we need to find first so that we can calculate the Gini index. Then, write an expression for THIS AREA that includes a definite integral. 2. Use the integral expression you wrote in #1 and the Fundamental Theorem of Calculus to find the Gini index for Ukraine in the year 2020. Show the substitutions necessary, but use fnint to do the calculation. Cumulative Wealth
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