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Income inequality refers to the dispersion of incomes between elements (e.g., people, households, groups, or regions) within an entity (e.g., a country or the world) to which they belong. It usually refers to how dispersed income is between people who have relatively higher income and those who have lower income within a country. This notion of income inequality, called vertical income inequality, is distinguished from horizontal income inequality, that is, inequality of income between groups or other entities that are distinguished by some characteristic other than income, such as gender and ethnicity.

The level of well-being of the people in a country is often conceptualized and measured with the average income or product of that country. Although this is problematic for a number of reasons, even ...

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