Students should post a short, relevant essay related to that week's material: it should open with a thesis, briefly defend that thesis, and have a useful title. You may write an essay about anything related to this week's material, so you do not need to respond one of my prompts. If your post does originate as an answer to one of my questions, write it as a standalone essay (i.e. leave out the question that motivated it). You are encouraged to link to relevant articles or videos from outside of class. Please respond to your peers' posts by either agreeing or disagreeing with them while presenting a new idea, anecdote, or data point. Disagreement is fine, but please do so respectfully and remember we're discussing ideas not people.

Why there is a need for measuring economic inequality? Economics is a choice for the best outcome in the scarcity of resources. In other words, Economics is a tool for the allocation and redistribution of resources. Resources must be distributed equitably and effectively, and Pareto Efficiency, which states that an economic condition where resources cannot be transferred to enable one person better off while resulting in at least one person being worse off, is how to assess optimal efficiency. Although it does not guarantee equality or justice, Pareto efficiency suggests that resources are distributed most cost-effectively. Efficient distribution may cause inequality of income or wealth in the population when the number is large and that has to be enumerated to have proper policy formation for redistribution of resources and wealth to stabilize the economy. So, in order to have an efficient distribution of wealth, there is a need for a fair policy that is based on the measurement of economic inequality in the economy. An inequality measure is frequently a tool that assigns a quantity to particular wealth distribution in order to facilitate direct and accurate comparisons between distributions. To accomplish this, inequality measures must possess specific characteristics and act in a particular way in the presence of specific circumstances. The amount of disparity should decrease, for instance, if $1 were transferred from a richer to a poorer individual. The selection of one measurement method over another includes trade-offs since no one metric cannot meet all attributes (Trapeznikova & Royal Holloway University of London, UK, 2019). Lorenz Curve is one such tool to measure income distribution among the population which measures inequality on the parameters of wealth held by the number of people. The accumulated amount of income beneficiaries is shown on the horizontal axis, sorted from lowest to richest person or family. The accumulated proportion of total income is shown on the vertical axis. The Lorenz curve shows the percentage of wealth held by what percentage of the population. It is typically shown about a 45-degree line representing complete equality, in which each x percentile of the demography gets the same x percentile of wealth. As a result, the further the Lorenz curve is from the 45-degree line, the more uneven the wealth distribution. Similarly, Gini Coefficient measures the deviation from the perfect line of equality. A higher Gini index indicates an uneven distribution. According to World Bank data, the Gini index fluctuated between 0.3 and 0.6 globally between 1981 and 2013 (“Gini Index,” 2008). The coefficient enables direct comparison of the income distributions of two populations of any size. The Gini’s fundamental restriction is that it is not easily degradable or multiplicative. Furthermore, it does not react similarly to income redistribution between persons at opposing ends of the wealth distribution as it does to contributions in the center. Furthermore, the identical Gini coefficient might be seen in widely distinct income distributions (Development Strategy and Policy Analysis Unit, 2015). There are other tools for measuring inequality, but Lorenz Curve and Gini Coefficient are the simplest and most widely cited for measuring inequality. They are used for the formulation of policies to make the best out of the available resources of any economy. Policies are based on utilizing the resources and redistributing them to make the society stable in economic terms which ultimately leads to social stability. Therefore, it is very important to measure economic inequality to formulate policies for resource allocation and reduce inequality in order to have the socio-economic stability of any economy. Page Break References Development Strategy and Policy Analysis Unit. (2015, Spring 10). Inequality Measurement Development Issues No. 2. Www.un.org. https://www.un.org/en/development/desa/policy/wess/wess_dev_issues/dsp_policy_02.pdf Gini Index. (2008). In The Concise Encyclopedia of Statistics (pp. 231–233). Springer New York. Trapeznikova, I., & Royal Holloway University of London, UK. (2019). Measuring income inequality. IZA World of Labor : Evidence-Based Policy Making. https://doi.org/10.15185/izawol.462

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Students should post a short, relevant essay related to that week's material: it should open with a thesis, briefly defend that thesis, and have a useful title. You may write an essay about anything related to this week's material, so you do not need to respond one of my prompts. If your post does originate as an answe