Suppose you're an economist working for the Brookings Institute and you've been asked to comment on what you see as a diverging level of inequality among representative households in two neighboring nations: Mira and Drovanna. You have the following information about these nations' households for 2014 (income values in 2014 US dollar equivalencies):
|
Mira
|
Drovanna
|
|
16000
|
28000
|
|
11000
|
32000
|
|
9000
|
56000
|
|
18000
|
43000
|
|
15000
|
88000
|
|
126000
|
36000
|
|
22000
|
27000
|
|
31000
|
61000
|
|
10000
|
59000
|
|
12000
|
48000
|
The Brookings Institute is about to recommend one of these nations to the World Bank as a nation deserving of additional development funds due to its significant need to close its income gap, the other will be recognized for its relatively low level of income inequality.
Question 1: Provide a fully articulated Lorenz Curve Model showing each of these two nations (both on the same model).
Question 2: What is the Gini Coefficient for Mira? (Remember to convert all percentage to decimal equivalents and to carry to the fourth decimal for high accuracy)
Question 3: What is the Gini Coefficent for Drovanna?