In the preceding chapters we assumed that each $ of net benefits of same value irrespective of sub-referent group . Atemporal – how income (and income changes) distributed among individuals or groups at present; ie. within present generation | © Harry Campbell & Richard Brown School of Economics The University of Queensland BENEFIT-COST ANALYSIS Financial and Economic Appraisal using Spreadsheets Ch. 11: Distributional Weighting Accounting for Income Distribution In the preceding chapters we assumed that each $ of net benefits of same value irrespective of sub-referent group We need to acknowledge and account for: Government’s income distribution objectives project’s distributional impacts Accounting for Income Distribution Atemporal – how income (and income changes) distributed among individuals or groups at present; ie. within present generation Atemporal vs. Intertemporal Distribution Intertemporal – how income (and income changes) distributed over time; ie. between present and future generations Accounting for Income Distribution How income is distributed among individuals or households Interpersonal distribution See Tables and Accounting for Income Distribution Measuring Interpersonal distribution Accounting for Income Distribution Measuring Interpersonal distribution Accounting for Income Distribution Measuring Inequality Income is obviously not equally distributed – some individuals or groups earn more than others The degree of income inequality can vary considerably between countries and, within a country, over time. Economists have devised ways of measuring degree of inequality Accounting for Income Distribution Measuring Inequality If income was equally distributed the Lorenz curve would lie on the diagonal The flatter the L-curve, the smaller the shaded area, the less the degree of inequality GINI Coefficient = shaded area as a % of whole triangle Cumulative % pop Cumulative % income Measure area outside the main triangle Each triangle = )/2 = Square = = Total =()+ = Gini coeff. = ()/ = = Measuring Inequality Assume 20% population earns 80% of income government can affect the distribution of income between sectors and | © Harry Campbell & Richard Brown School of Economics The University of Queensland BENEFIT-COST ANALYSIS Financial and Economic Appraisal using Spreadsheets Ch. 11: Distributional Weighting Accounting for Income Distribution In the preceding chapters we assumed that each $ of net benefits of same value irrespective of sub-referent group We need to acknowledge and account for: Government’s income distribution objectives project’s distributional impacts Accounting for Income Distribution Atemporal – how income (and income changes) distributed among individuals or groups at present; ie. within present generation Atemporal vs. Intertemporal Distribution Intertemporal – how income (and income changes) distributed over time; ie. between present and future generations Accounting for Income Distribution How income is distributed among individuals or households Interpersonal distribution See Tables and Accounting for Income Distribution Measuring Interpersonal distribution .
