Economics 317
Poverty and Inequality
Lab Exercise Part 3
You will work in groups and be able to answer the questions listed below. At the end of this exercise will be able to create a Lorenz Curve and calculate a Gini Coefficient or Index from the Vancouver 1901 database. Each student must submit their own assignment by March 26th. You may submit your work on a separate document. Be sure to include your answers to all of the questions below.
- Download and open the Excel file 317 Vancouver 1901 (v March 2018).xls to be found on the Connect website for our course.
Do you observe any notable patterns among the households? Do you notice anything unusual about the incomes in some households? What are the implications if you include or exclude these individuals in your income distribution? Discuss your rationale for including or excluding them.
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- What is the sample size? ______________
- How many dwellings are in the sample? ___________________
- What is the total income for the sample? ___________________
- Estimate the income distribution of this sample of individuals form the population of Vancouver. Show the distribution by quintiles.
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- Draw the Lorenz Curve for this income distribution. Show all the appropriate points on the two axes and on the curve itself.
- Calculate the gini coefficient using this Lorenz diagram. The formula for calculating the gini graphically from the Lorenz curve is on the lecture notes. You will need to think about how to calculate the area under each of the curves. Show your work.
- We can also calculate the gini coefficient mathematically. Show your work.
