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Alternative Measures of Income Inequality

AS, A-Level, IB
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 21 Mar 2021

This short revision video looks at two alternative measures of the scale of income inequality - namely the S80-S20 ratio and the Palma Ratio. The video draws on the latest available data for countries with the highest and the lowest measured income inequality.

Alternative Measures of Income Inequality

S80-S20 Quintile ratio

This is the ratio of the average income of the richest 20% of the population to the average income of the poorest 20% of the population

Palma Ratio

The Palma Ratio is the ratio of the richest 10% of the population's share of gross national income divided by the poorest 40%'s share

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