Question

12) The percentage of people in the highest income quintile in 1987 that remained in the highest quintile by 2007 was:

a) 48.4%

b) 23.3%

c) 24.4%

d) 95%

Answer 1

The question asked here is pretty straightforward and doesn't require much of theoretical understanding. However, I will not directly skip to the question and give the answer, I'll first try and define the meaning of the statistical term "quintile".

Quintile is nothing but a method of sorting a data set and segregating it into equal halves. Now, we can divide the data set into four equal parts (quartiles), ten equal parts (deciles), hundred equal parts (percentiles) or five equal parts (quintiles).

Quintiles are mostly used in income statistics to find out how income distribution among the population. The population is first divided into five equal parts based on the levels of income.  the first quintile contains the bottom one-fifth of the population (i.e. the 20 % of the population) having the lowest income, the second quintile consists of the second fifth (20 % to 40 %) ...; the fifth quintile represents the 20 % of the population with the highest income.

As per one of the articles on Income Migration, the author had collected data - i.e., the tax return files of a large number of people, belonging to the 1987 era and 2007 era. After thorough research and survey, he came to the conclusion that less than half (50%) of the people who belonged to the highest income quintile were still in that strata in 2007. The exact figure, as per his record (collected from Treasury departments and other important departments of the US government) lied somewhere between 40% and 49%.

The percentage of people in the highest income quintile in 1987 that remained in the highest quintile by 2007 was: 48.4% (option a)

Answer: Option (a)