Equity and redistribution
Equity vs equality
- equity = fairness (people getting what is fair, not always equal).
- equality = everyone getting the same.
- A fair outcome is not always an equal one.
- income is a flow; wealth is a stock of assets.
Practice
Equity means:
Equity is fairness; equality is everyone getting the same — they are not identical.
Measuring inequality
- the Lorenz curve plots the share of income against the share of population (poorest first). The more it sags below the line of equality, the more unequal.
- the Gini coefficient turns this into one number (0 = perfect equality, 1 = total inequality).
Practice
A higher Gini coefficient (closer to 1) means:
Gini runs 0 (perfect equality) to 1 (one person has everything); higher = more unequal.
Redistribution
- a progressive tax takes more from higher incomes.
- benefits (transfer payments) go to the poor, old and unemployed.
- free state services raise the poor's real living standards.
- Wealth is harder to redistribute than income (the rich can hide/move assets).
Practice
Wealth is generally harder to redistribute than income.
The rich can hide assets or move them abroad, and wealth taxes are hard to collect.
You've got it
Key idea
- equity = fairness (not always equal); income = flow, wealth = stock
- Lorenz curve (sag) + Gini coefficient (0–1) measure inequality
- redistribute via progressive tax, benefits, free services; wealth is harder to redistribute