How do income inequality (Gini coefficient), literacy rate and fertility rate affect per-capita GDP?
The Gini coefficient is a measure of income inequality, calculated from the cumulative distribution of wealth by income percentile (Lorenz curve). It is the ratio of the area between the Lorenz curve and the 45-degree line representing a perfectly equal income distribution, divided by the total area under the 45-degree line. A nation with a low Gini coefficient (<0.3) will typically have a large middle class and relatively few very poor or very rich people. A nation with a very high Gini coefficient (>0.6) will typically have extensive poverty, little or no middle class, and a small economic elite. US income inequality has increased. The Census Bureau has reported rising Gini coefficients: 0.394 in 1970, 0.403 in 1980, 0.428 in 1990, 0.462 in 2000 and 0.469 in 2005. Use the data in the second worksheet tab (121 nations for which Gini coefficients were calculated) to regress per-capita GDP against the Gini coefficient, overall literacy rate and fertility rate. Use Excel’s Data-Analysis
