Alternative Measures of Income Inequality

This short revision video looks at two alternative measures of the scale of income inequality - namely the S80-S20 ratio and the Palma Ratio. The video draws on the latest available data for countries with the highest and the lowest measured income inequality.

S80-S20 Quintile ratio

This is the ratio of the average income of the richest 20% of the population to the average income of the poorest 20% of the population

Palma Ratio

The Palma Ratio is the ratio of the richest 10% of the population's share of gross national income divided by the poorest 40%'s share