10.19 The following table shows the income distribution by quintile for the UK in 20062007, for various...

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10.19 The following table shows the income distribution by quintile for the UK in 2006–2007, for various definitions of income: Quintile Income measure Original Gross Disposable Post-tax 1 (bottom) 3% 7% 7% 6% 2 7% 10% 12% 11% 3 15% 16% 16% 16% 4 24% 23% 22% 2% 5 (top) 51% 44% 42% 44%

(a) Use equation (10.27) to calculate the Gini coefficient for each of the four categories of income.

(b) For the ‘original income’ category, draw a smooth Lorenz curve on a piece of gridded paper and calculate the Gini coefficient using the method of counting squares. How does your answer compare to that for part (a)?

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