00:01
Hey everyone, today we're answering problem number 20 from chapter 14 of the textbook, which asks us to state who is included in the top income quintile.
00:14
So what is it quintile? well, one way to measure income distribution is three quintiles, especially income inequality.
00:24
And it's to rank all households by income, from lowest to highest, and then to divide all the households into five groups with people in the income, numbers of people and these five groups with the equal number of people each with an equal number of people each of those five groups is known as a quintile basically a quintile the best way to think about it i think is to think it's 20 percent because it's 20 percent of a 100 percent total because obviously 100 percent represents the total anything and 20 percent is one -fifth of that so think of 100 percent as the total population and then 20%, you have 20%, 40%, 60%, 80%, and 100%.
01:11
So between 0 % and 20 % is your first quintile, between 20%, 40 % is your second quintile, and so forth, until your fifth quintiles between 80 % and 100%.
01:20
So it says that the first quintile, as i just mentioned, is the lowest, or 20%, the second quintiles, the next lowest, and so on.
01:28
You can measure income inequality by comparing what share of the total income each quintile earned.
01:35
So in the top intract, sorry, in the top quintile, people who are going to be included are the people.
01:54
Actually, it's not the people, right? it's the households.
01:59
That's an important thing to remember...