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Positive assortative matching. (25 marks) Let us define high income in this society as an income of R20, 000.00 and more. Suppose that high income
Positive assortative matching. (25 marks) Let us define high income in this society as an income of R20, 000.00 and more. Suppose that high income earners of opposite genders are matched to (married to) other high-income earners, and the rest of the population are randomly matched. a. What matching among high income earners results in the highest Gini coefficient? You may express your matches in pairs, for example, (1, 2) mean that a person with ID 1 is matched with a person with ID 2. Your final answer will be a list of matchings. b. What matching among high income earners results in the lowest Gini coefficient? c. What is the Gini coefficient when people are randomly matched? d. Comment briefly on how positive assortative matching affect income inequality
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