Now we will look at other measures of income inequality to see how they can be used with the Gini coefficient to summarize a countrys income distribution. Instead of summarizing the entire income distribution like the Gini coefficient does, we can take the ratio of incomes at two points in the distribution. For example, the 90/10 ratio takes the ratio of the top 10% of incomes (Decile 10) to the lowest 10% of incomes (Decile 1). A 90/10 ratio of five means that the richest 10% of the population earn five times more than the poorest 10%. The higher the ratio, the higher the inequality between these two points in the distribution.

1. Look at the following ratios:

   • 90/10 ratio = the ratio of Decile 10 income to Decile 1 income
   • 90/50 ratio = the ratio of Decile 10 income to Decile 5 income (the median)
   • 50/10 ratio = the ratio of Decile 5 income (the median) to Decile 1 income

Answer the following below in 3-4 sentences:

• For each of these ratios, explain why policymakers might want to compare the two deciles in the income distribution.
• What kinds of policies or events could affect these ratios