Short Answer 2 INCOME QUINTILE IN 1975 5th (highest) 4th 3rd (middle) 2nd 1st (l

Question

Short Answer 2 INCOME QUINTILE IN 1975 5th (highest) 4th 3rd (middle) 2nd 1st (lowest) 1ST 0.9 1.9 3.3 4.2 PERCENTAGE IN EACH QUINTILE IN 1991 3RD 10.2 18.8 28.3 20.3 21.0 2ND 2.8 9.3 19.3 23.5 14.6 4TH 23.6 32.6 30.1 25.2 30.3 5TH 62.5 37.4 19.0 26.8 29.0 In the table, how do we interpret the number 5.1 (5 pts). Looking across a row, why do the numbers sum to 100 (2 pts)? Focusing on the 1st and the 5th (lowest and highest) income quintiles, is there more evidence for upward or downward income mobility (1 pt)? (e.g. Are you more like to rise or fall in the income distribution?) Explain (7pts)

Explanation / Answer

The term 5.1 represents that 5.1% of the individuals were in lowese t quintile in both 1975 and 1991.

The first row represents the distribution of individuals in 5th quintile in 1975 across different quintiles in 1991.Therefore the sum across row is 100%.

There is upward income mobility because 29 % of individual who were in first quintile in 1975 has move d to 5th quintile in 1991.

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