Poverty and inequality

when a person has insufficient resources to meet human needs

when a person is living below a certain income threshold in a particular country

$2.15

highly subjective, changes over time, cannot easily be used to make international comparisons

UN human poverty index, ratio method

combines components such as life expectancy, literacy rates, long-term unemployment and relative income

calculates the proportion of income spent on basic necessities such as food or energy

level of indebtedness, level of unemployment, health or education, access to public services, state of the economy and real incomes, distribution of income

the money earned by a person over a period of time

the unequal distribtuion of earning between individuals

the stock of assets a person owns

the difference in the value of stocks of assets owned by individuals

Lorenz curve, Gini coefficient

cumulative percentage of income against the cumulative percentage of population

perfect equality

the income distribution for a partical country

absolute equality

absolute inequality

globalisation, difference in education, training and skills, differences in wage rates in different occupations, strength of trade unions, employment protection, level of welfare benefits, progressiveness of the tax system

natural resources, history, political stability, macroeconomic policies, amount of foreign direct investment (FDI), trade liberalisation, technological change

in a primarily agricultural economy at an early stage of development, incomes are relatively evenly distributed, indistralisation increases inequality but at some point it starts to decrease

inquality against income per capita

free markey economy in which resources are owned by the private sector and prices are determined by supply and demamd