The Gini index for the country Trout is 44. The Gini index for country Sardine 2

Question

The Gini index for the country Trout is 44. The Gini index for country Sardine 22. You want to live in the country where you will receive the most absolute, total amount of income if you are among the richest 20% of the households. Which country should you choose? a. Trout b. Sardine c. Unable to determine. The Gini index for the country Trout is 44. The Gini index for country Sardine 22. You want to live in the country where you will receive the most absolute, total amount of income if you are among the richest 20% of the households. Which country should you choose? a. Trout b. Sardine c. Unable to determine. The Gini index for the country Trout is 44. The Gini index for country Sardine 22. You want to live in the country where you will receive the most absolute, total amount of income if you are among the richest 20% of the households. Which country should you choose? a. Trout b. Sardine c. Unable to determine.

Explanation / Answer

Lower the gini coefficient higher the equality. When Gini coefficient is 0 the economy does not have any inequality while, when it is 1 the economy is said to be in equal.

Gini index is the area between the 45 degree line and the Lorenz curve. In Trout Gini index is 44 this means it has more income inequality while Sardine has Gini index of 22 thus it is nearer to the 45 degree line thus this country has lower income inequality.

Hence, the top 20% household should choose Trout.

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