Practise defining and interpreting the Gini coefficient, comparing income inequality using Gini values, and explaining how governments use inequality measures.
Explain how the Gini coefficient is used to measure income inequality and consider the relative strength of two economic reasons suggested for such inequality in a low-income country.
Follow the point-based marking guidance at the top of this mark scheme and award:
up to 3 marks for AO1 Knowledge and understanding up to 3 marks for AO2 Analysis up to 2 marks for AO3 Evaluation.
AO1 Knowledge and Understanding (max 3 marks)
For a clear understanding of what the Gini coefficient is e.g., it is a numerical measure of the extent of income inequality in an economy (1) if there is no inequality the value will be zero and at the other extreme, if all income is earned by one person the value will be one (1) For an explanation that the nearer the value is to zero income is more equally distributed and/or the nearer the value is to one the more it is unequally distributed (1).
AO2 Analysis (max 3 marks)
Reasons may include:
- A lack of employment opportunities e.g., which will mean that income levels are low (1) which may be more of a problem in low-income countries because industry may be less well developed (1).
- Poor vocational training e.g., leading to fewer people being able to develop their skills and earn a higher income (1). This may be more of a problem in such countries because of the lack of finance to provide such training. (1)
- A lack of investment in education and health e.g., meaning that some people may not receive a better level of education or may suffer long term health issues which will lower their potential income levels. (1) This may be more common in such countries due to a lack of government budget (1)
- Other reasons include:
- Poor infrastructure
- Lack of access to loan finance
Analysis must focus on the strength of two of these reasons in a low-income country. Maximum of 2 marks if only one reason considered.
One mark per reason explained (+1) if clearly related to a low-income country.
Marking guidance:
Accept any valid reason provided it is explained in terms of economics. Maximum of 2 marks if only one reason is considered.
AO3 Evaluation (max 2 marks)
Up to 2 marks for evaluating the relative strength of the two reasons with 1 mark reserved for a balanced judgement as to which may be the most likely reason in a low-income economy.
2(a)
Please use a text box to show the mark split e.g., 2,2,1
AO1 Knowledge and understanding
AO2 Analysis
AO3 Evaluation