Getting the Measure of Income Inequality?

Can we measure poverty and income inequality like this, and if so, then so what? Image is open source:

Today’s seminar is about income inequality, or rather how we can measure it and what it might be related to.

Wikinson and Pickett (2010) argue that health and social problems in rich countries ‘are not caused by the society not being rich enough (or even being too rich) but by the scale of material differences between people with each society being too big. What matters is where we stand in relation to others in our own society’, (p.25). In what ways does their comparative statistical analysis of the relationship between income, income inequality and measures of health and social problems lends support to their argument?”

Notice the question does not ask you to consider whether you agree with the authors, or to reflect on its implications. You are being asked to consider to what extent their methods support their arguments. As usual framing the discussion through questions is more educational.

What is the Gini co-efficient and why does it matter for this study?

Why  did the use the ratio of income received by the top 20% to the bottom 20%?

Does it matter according to the authors which measure of income inequality one uses?

Why did the collect data from all 50 states of the USA rather than simply use national level USA data to test for a relationship between income inequality and social problems they list?

What relationship did they find between inequality and health and social problems?

How did the validate that relationship using average ?

How did the USA states stack up-was it the same story?

Where did they collect their data and why is this important?

Why did they run a similar test on the relationship between income inequality and child well being index rankings-is the line in Figure 2.6 really as perfect a fit as in 2.2? What is this telling us?

Much of their work is based on showing a correlation between sets of social variables measures by data-does a strong correlation(association) demonstrate a causal relationship? Does high levels of income inequality cause health and social problems?


for a discussion that points how dangerous it can be to assume a correlation shows causation?

Might the relationship be more complex and even reversed?

In fact the book has been criticized as not being always correct in its approach: See: and the authors responded with a very strong claim that their research is still valid:



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