ECSENOMICS Chapter 19 Efficiency VS. Equality The Big Trade-off McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 19 Efficiency vs. Equality: The Big Trade-off
ECSENOMICS Lorenz Curve shows Income Inequalit 1-137 Figure 19-1 100 Curve of absolute equality Deviation from bsolute equality Actual distribution of U.S. incon 1998 Curve of absolute 0 20 80 100 Percent of people McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Lorenz Curve Shows Income Inequality T-137 Figure 19-1
ECSENOMICS Inequity Differs in Different Societies and Is Greater for Wealth Than for Income T-138 Figure 19-2 (a) Income Inequalities (b) Inequality of Wealth 100 Sweden Great Britain United States Brazil United States Britain 二_L ⊥--3-10 Percent of people Percent of consumer units ource:Federal Reserve Board, Survey of Consumer Finances, Washington, D.C. 1989: A.B. Atkinson and A.J. Harrison. "Trends in the Distribution of Wealth in Britain, "in A B. Atkins on, ed, Wealth, Income and Inequity McGraw-Hilllrwin (Oxford University Press, London, 1980); World Developme nt Report 1993
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Inequity Differs in Different Societies and Is Greater for Wealth Than for Income T-138 Figure 19-2 Source: Federal Reserve Board, Survey of Consumer Finances, Washington, D.C., 1989; A.B. Atkinson and A.J. Harrison, “Trends in the Distribution of Wealth in Britain,” in A.B. Atkinson, ed, Wealth, Income and Inequity (Oxford University Press, London, 1980); World Development Report 1993
ECSENOMICS Inequality in Different Countries 1-139 Figure 19-3 期mB McGraw-Hilllrwin Source: Koen Vleminckx, Luxembourg Income Study, August 1998, availa ble on the Internet
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Inequality in Different Countries T-139 Figure 19-3 Source: Koen Vleminckx, Luxembourg Income Study, August 1998, available on the Internet
ECSENOMICS Trends in Inequality in the United States. 1929-1994 1-140 Figure 19-4 15 14 Series 1 走 13 JEE 12 10 1920 1940 1960 19〉 2000 Year McGraw-Hilllrwin Source: U.S. Bureau of the Census, with historical series spliced together by authors
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Trends in Inequality in the United States. 1929-1994 T-140 Figure 19-4 Source: U.S. Bureau of the Census, with historical series spliced together by authors
ECSENOMICS Redistributing Income May harm Economic Efficiency 1-141 Figure 19-5 E 45° 45 Real income of upper half McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Redistributing Income May Harm Economic Efficiency T-141 Figure 19-5
ECSENOMICS Welfare Cases and Unemployment 1970-1998 1-142 Figure 19-6 Unemployment te 6 Welfare participation rate 目2 19701974197819821986199019941998 Ye McGraw-Hilllrwin Source: Council of Economic Advisers. The we fare participation rate is the
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Welfare Cases and Unemployment, 1970-1998 T-142 Figure 19-6 Source: Council of Economic Advisers. The welfare participation rate is the number of welfare recipients divided by the population
ECSENOMICS Free Health Care Guarantees Nonprice rationing 1-143 Figure 19-7 PM Government Excess demand subsidy of 80% of cost B 20%of Q Quantity of medical care McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Free Health Care Guarantees Nonprice Rationing T-143 Figure 19-7