help me scam my students

Wojtek Sokolowski sokol at jhu.edu
Thu Aug 9 11:44:00 PDT 2001



>Average household incomes usually come in below per capita GDP, with
>the discrepancy tending to widen with income. Milanovic uses
>household survey numbers.
>

But it is difficult to estimate without launching a survey. Assuming that GDP is by definition the sum of all factors of production, we can approximate income inequalities if we know the GDP, the total population, and the percent share per quintile. Consider the following example, in which a hypothetical country of 20 million peope has the GDP of 100 bn. Per capita GDP is thus 5 thousand. Knowing that upper quintile has 40% of the income, th enext quintile - 20%, next - 15%, penultimate - 14% and the lowest - 10% - we can calculate per capita GDP for each group as shown below:

GDP pop GDP per cap total 100,000,000,000 20,000,000 5,000 0.1 10,000,000,000 4,000,000 2,500 0.15 15,000,000,000 4,000,000 3,750 0.15 15,000,000,000 4,000,000 3,750 0.2 20,000,000,000 4,000,000 5,000 0.4 40,000,000,000 4,000,000 10,000

Sure, it is a proxy, but can do the trick for illustrative purposes.

wojtek



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