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Chapter 15: Q 22. (page 378)

Who is included in the top income quintile?

Short Answer

Expert verified

The top income quintile is the fifth quintile (the last quintile) consisting of all higher incomes that comes just after the fourth quintile.

Step by step solution

01

Step 1. Quintile

Quintile is a method of measuring income inequality using the following steps.

1. Rank all the incomes from the lowest to the highest.

2. Divide all the incomes into five groups having equal numbers of people. Each of these groups is called quintile.

3. For calculating income distribution, divide the income of each quintile by the total income of all people.

02

Step 2.  The top income quintile

The top income quintile includes the fifth quintile or the last group of people having higher incomes (that comes just after the fourth quintile) and the last highest income in the series.

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Most popular questions from this chapter

Identify some public policies that can reduce the

level of economic inequality.

Imagine that the government reworks the welfare policy that was affecting Jonathan in question 1, so that for each dollar someone like Jonathan earns at work, his government benefits diminish by only 30 cents. Reconstruct the table

from question 1 to account for this change in policy. Draw Jonathan’s labor-leisure opportunity sets, both for before

this welfare program is enacted and after it is enacted.

What are the main reasons economists give for the

increase in inequality of incomes?

If a country had perfect income equality what

would the Lorenz curve look like?

A group of 10 people have the following annual incomes: \(24,000, \)18,000, \(50,000, \)100,000, \(12,000,

\)36,000, \(80,000, \)10,000, \(24,000, \)16,000. Calculate the share of total income that each quintile receives from this

income distribution. Do the top and bottom quintiles in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution?
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