Distribution+of+Income+and+Wealth

Distribution of Income and Wealth


 * __Helen__**

__ Personal income  __  -   The amount of funds or other benefits measured in money terms that flow to individuals or households from the sale of factors of production over a period of time. __ Forms of income  __  -   wages from labour, rent from land, interest from capital and profit from enterprise -   also pensions and benefits from the government __ Income __ – regarded as the benefit of owning, maintaining and managing the factors of production __ Income inequality  __  -   The degree to which income is unevenly distributed amongst people in the economy. (share of income and the gap)  -   Measured by the share of total income received by different groups, represented through five quintiles (20%)  Quintile  ||||  Share of income (%)  ||  Year  ||  1995 - 96  ||  2005-06  ||  Lowest quintile  ||  8.1  ||  7.9  ||  Second quintile  ||  13.0  ||  12.9  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Third quintile  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 17.7  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 17.6  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Fourth quintile  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 23.9  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 23.2  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Highest quintile  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 37.3  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 38.5  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Gini coefficient  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 0.296  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 0.307  ||
 * __<span style="font-size: 16pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-hansi-font-family: Calibri;"> 11.2 - Measuring the distribution of income and wealth __**

<span style="font-size: 12pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri; msoasciifontfamily: Calibri; msobidifontfamily: Calibri; msofareastfontfamily: Calibri; msohansifontfamily: Calibri; msolist: Ignore;"> -   This table represents an increase in the difference in share of income with the lowest quintile receiving a lower share of income and the highest quintile receiving a higher share of income. <span style="font-size: 12pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri; msoasciifontfamily: Calibri; msobidifontfamily: Calibri; msofareastfontfamily: Calibri; msohansifontfamily: Calibri; msolist: Ignore;"> -   The Gini coefficient increased from 0.296 to 0.307 representing an increase in income inequality __ Mean income  __ <span style="font-size: 12pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri; msoasciifontfamily: Calibri; msobidifontfamily: Calibri; msofareastfontfamily: Calibri; msohansifontfamily: Calibri; msolist: Ignore;"> -   The average level of income. Divide total income of a group by the number of income recipients in that group __ Median income  __ <span style="font-size: 12pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri; msoasciifontfamily: Calibri; msobidifontfamily: Calibri; msofareastfontfamily: Calibri; msohansifontfamily: Calibri; msolist: Ignore;"> -   The level of income that divides income recipients into two groups, with half on each side **// Measuring income inequality – the Lorenz curve  //**

<span style="font-size: 12pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri; msoasciifontfamily: Calibri; msobidifontfamily: Calibri; msofareastfontfamily: Calibri; msohansifontfamily: Calibri; msolist: Ignore;"> -   constructed by plotting the cumulative percentage of total income received against the cumulative percentage of income recipients. <span style="font-size: 12pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri; msoasciifontfamily: Calibri; msobidifontfamily: Calibri; msofareastfontfamily: Calibri; msohansifontfamily: Calibri; msolist: Ignore;"> -   If income was distributed evenly the Lorenz curve would be the diagonal line(line of inequality) <span style="font-size: 12pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri; msoasciifontfamily: Calibri; msobidifontfamily: Calibri; msofareastfontfamily: Calibri; msohansifontfamily: Calibri; msolist: Ignore;"> -   The further the Lorenz curve is away from the line, the greater the inequality

A single statistic that summarises the distribution of income across the population
 * // Measuring income inequality – the Gini coefficient  //**


 * Gini Coefficient=**

__A__ A+B

The Gini coefficient ranges between zero when all incomes are equal, and one when a single household receives all the income The smaller the Gini coefficient, the more even the distribution of income There is substantial inequality of wealth in Australia, but has remained very stable in recent decades **<span style="color: #ff0066; font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Quintile ** |||||||| **<span style="color: #ff0066; font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Share of income (%) ** || **<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Year ** || **<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 1915 ** || **<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 1998 ** || **<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 2004 ** || **<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 2006 ** || //<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Lowest quintile // || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 0  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 0  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 1  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 1  || //<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Second quintile // || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 0  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 3  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 6  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 6  || //<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Third quintile // || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 2  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 10  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 13  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 12  || //<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Fourth quintile // || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 8  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 22  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 21  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 20  || //<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Highest quintile // || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 90  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 65  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 59  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 61  || //<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Top 1% // || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 39  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 12  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;">  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;">  || //<span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> Gini coefficient // || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 0.86  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;"> 0.64  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;">  || <span style="font-size: 12pt; mso-bidi-font-family: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-AU;">  || - The top 20% of wealthy people own around 61% of total wealth in Australia and the bottom 20% own almost nothing - This means 70% of households have less than the average of household wealth $563, 000 - It takes longer for the wealth inequality to change compared with income inequality, but above the statistics highlight some of the general trends over a long time frame - Between 1915 and 1967, wealth inequality in Australia improved dramatically as a result of urbanisation and industrialisation, and the declining significance of rural landholders that dominated wealth holding in the early part of the twentieth century - Worsened from 1967 to 1986, wealth inequality remained stable with the Gini coefficient remaining near 0.64 from 1986 to 1998 - Whilst inequality has grown across many types of wealth assts such as home ownership, ownership of residential land, shares and financial investments this has been counterbalanced by growth of superannuation wealth, which is more equally distributed due to compulsory superannuation
 * // Measuring the distribution of wealth in Australia  //**