0

The Atkinson Inequality Index

Description: Assess your understanding of the Atkinson Inequality Index, a measure of income inequality that considers both the distribution of income and the level of inequality.
Number of Questions: 15
Created by:
Tags: economics economic welfare atkinson inequality index
Attempted 0/15 Correct 0 Score 0

The Atkinson Inequality Index (AII) is a measure of:

  1. Income inequality

  2. Wealth inequality

  3. Health inequality

  4. Education inequality


Correct Option: A
Explanation:

The Atkinson Inequality Index is specifically designed to measure income inequality, taking into account both the distribution of income and the level of inequality.

The AII is based on the concept of:

  1. Lorenz curve

  2. Gini coefficient

  3. Social welfare function

  4. Pareto efficiency


Correct Option: C
Explanation:

The AII is derived from a social welfare function that assigns weights to different levels of income inequality.

The AII formula includes a parameter (epsilon), which represents:

  1. The level of inequality aversion

  2. The mean income

  3. The Gini coefficient

  4. The Lorenz curve


Correct Option: A
Explanation:

The (epsilon) parameter in the AII formula reflects the society's aversion to inequality, with higher values indicating a stronger aversion.

The AII is calculated as:

  1. (1 - (1 / mu) \int_0^1 [P(x)]^{1-epsilon} dx)

  2. (1 - (1 / mu) \int_0^1 [L(x)]^{1-epsilon} dx)

  3. (1 - (1 / mu) \int_0^1 [G(x)]^{1-epsilon} dx)

  4. (1 - (1 / mu) \int_0^1 [A(x)]^{1-epsilon} dx)


Correct Option: A
Explanation:

The AII formula involves integrating the貧困率 function (P(x)) raised to the power of (1-epsilon) over the range of incomes ([0, 1]) and then subtracting the result from 1.

The AII ranges from:

  1. 0 to 1

  2. -1 to 1

  3. 0 to infinity

  4. -infinity to infinity


Correct Option: A
Explanation:

The AII takes values between 0 and 1, with 0 representing perfect equality (i.e., everyone has the same income) and 1 representing perfect inequality (i.e., one person has all the income).

A higher AII value indicates:

  1. More income inequality

  2. Less income inequality

  3. No change in income inequality

  4. Cannot be determined


Correct Option: A
Explanation:

A higher AII value corresponds to a higher level of income inequality, as it reflects a greater aversion to inequality.

The AII is considered to be:

  1. A more comprehensive measure of inequality than the Gini coefficient

  2. A less comprehensive measure of inequality than the Gini coefficient

  3. Equally comprehensive as the Gini coefficient

  4. None of the above


Correct Option: A
Explanation:

The AII is generally regarded as a more comprehensive measure of inequality compared to the Gini coefficient, as it takes into account both the distribution of income and the level of inequality.

The AII is sensitive to:

  1. Changes in the distribution of income

  2. Changes in the level of income inequality

  3. Both changes in the distribution of income and changes in the level of income inequality

  4. None of the above


Correct Option: C
Explanation:

The AII is sensitive to both changes in the distribution of income (i.e., the貧困率 function) and changes in the level of income inequality (i.e., the (epsilon) parameter).

The AII can be used to:

  1. Compare income inequality across countries or regions

  2. Analyze the impact of economic policies on income inequality

  3. Evaluate the effectiveness of anti-poverty programs

  4. All of the above


Correct Option: D
Explanation:

The AII is a versatile measure that can be used for various purposes, including comparing income inequality across countries or regions, analyzing the impact of economic policies on income inequality, and evaluating the effectiveness of anti-poverty programs.

Which of the following is NOT a limitation of the AII?

  1. It is sensitive to changes in the貧困率 function

  2. It is sensitive to changes in the (epsilon) parameter

  3. It is difficult to interpret

  4. It is computationally complex


Correct Option: C
Explanation:

The AII is generally considered to be easy to interpret, as it provides a clear numerical value between 0 and 1, with higher values indicating more inequality.

The AII has been used in studies to examine income inequality in:

  1. Developed countries

  2. Developing countries

  3. Both developed and developing countries

  4. None of the above


Correct Option: C
Explanation:

The AII has been widely used in research studies to examine income inequality in both developed and developing countries, providing valuable insights into the distribution of income and the level of inequality.

The AII is a relatively:

  1. New measure of income inequality

  2. Old measure of income inequality

  3. Moderately new measure of income inequality

  4. Moderately old measure of income inequality


Correct Option: C
Explanation:

The AII was first proposed by Anthony B. Atkinson in 1970, making it a moderately new measure of income inequality compared to some other well-established measures like the Gini coefficient.

The AII is sometimes referred to as the:

  1. Atkinson index

  2. Atkinson measure

  3. Atkinson coefficient

  4. All of the above


Correct Option: D
Explanation:

The AII is commonly referred to as the Atkinson index, Atkinson measure, or Atkinson coefficient, with all terms being used interchangeably.

The AII is a valuable tool for:

  1. Policymakers

  2. Researchers

  3. Both policymakers and researchers

  4. None of the above


Correct Option: C
Explanation:

The AII is a useful tool for both policymakers and researchers, as it provides a comprehensive measure of income inequality that can inform policy decisions and guide research on economic welfare.

The AII has been criticized for:

  1. Being too sensitive to changes in the distribution of income

  2. Being too sensitive to changes in the (epsilon) parameter

  3. Both of the above

  4. None of the above


Correct Option: C
Explanation:

The AII has been criticized for being too sensitive to changes in both the貧困率 function and the (epsilon) parameter, which can lead to variations in the measured level of inequality.

- Hide questions