Methodical approaches to assessment of life quality indicators in Ukraine
Journal Title: Регіональна Економіка - Year 2016, Vol 80, Issue 2
Abstract
The existing intergroup, sectoral, regional disparities in terms of incomes affect economic development as a single economic space. In this regard, there is a need to develop a comprehensive approach to measuring differentiation and polarization of population by income inequality indicators. For the task the theoretical and empirical methods of economic phenomena research were used. Theoretical methods (hypothetical-deductive, systematic and structural, structural-functional analysis) were used in determining the economic essence of inequality indices and their place in the structure of income distribution in society. Empirical methods (comparison, observation, analysis) were used in the analysis of the impact of income distribution in society at different levels of development of the world economies. Methodical approaches to determining of the poverty level and features of income distribution asymmetry in the countries are examined and the advantages and disadvantages of practical use of each of the methods are analyzed. Methodic of calculation of each index is presented and statistics on Gini index in the world is analyzed. Decomposed Gini index is widely used to analyze the factors of inequality by sources of income and consumption, i.e. to analyze how various sources of income and consumption affect the inequality in total income and consumption per capita (or per equivalent adult when using equivalence scale). The matrix for the coefficient Gini index elasticity by income was built. It was determined that the economies with similar incomes and Gini index may have very different distribution of income, because the Lorenz curves can have different forms, but give the same Gini index. Too often only the Gini coefficient is taken into account, without describing ratios used for its measurement. Accuracy of Gini index calculations is also influenced by the details of calculation. It is shown that the Gini coefficient corresponds to the four essential principles: anonymity - no matter who earns a lot, and who little; independence of grading scale: the Gini index does not consider the size of the economy, whether the country is poor or rich; not dependence on the number of population: no matter what is the number of population in the country; transfer principle: if income (less than the difference), is transferred from a rich person to a poor, final distribution is more equal.
Authors and Affiliations
Olena O. Prymostka
Keywords
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