# Gini coefficient

a. In the presence of an underground economy likely to result in a Gini coefficient that overstates or understates poverty?
b. Consider a simple economy where 90 percent of citizens report an annual income of \$10,000 while the remaining 10 percent report an annual income of \$110,000. What is the Gini coefficient now?
c. suppose the poorest 90 percent of citizens actually have an income of \$15,000 because each receives \$5,000 of unreported income from the underground economy. what is the Gini coefficient now?

# Gini coefficient

a. In the presence of an underground economy likely to result in a Gini coefficient that overstates or understates poverty?
b. Consider a simple economy where 90 percent of citizens report an annual income of \$10,000 while the remaining 10 percent report an annual income of \$110,000. What is the Gini coefficient now?
c. suppose the poorest 90 percent of citizens actually have an income of \$15,000 because each receives \$5,000 of unreported income from the underground economy. what is the Gini coefficient now?