Science Fair Project Encyclopedia Income inequality metrics
Income inequality metrics or income distribution metrics are
techniques used by economists to measure the distribution of
income among members of a society. In particular these
techniques are used to measure the inequality, or equality of
income within an economy. These techniques are typically
categorized as either absolute measures or relative measures.
Absolute income criteria Absolute measures define a minimum
standard, then calculate the number (or percent) of individuals
below this threshold. These methods are most useful when
determining the amount of poverty in a society. Examples
include: - Poverty line - This is a measure of the level of
income necessary to subsist in a society and varies from place
to place and from time to time depending on the cost of living
and peoples' expectations. It is usually defined by governments
and calculated as that level of income at which a household will
devote two-thirds (to three-quarters) of its income t