Question

Religious Diversity and Economic Inequality Is there a relationship between religious diversity and economic inequality? Please use the RELDIV.csv dataset, which includes the religious diversity index (variable reldiv, independent variable) and economic inequality index (variable wbgini, dependent variable) for 143 countries to answer the question. Compute Spearman’s Rho and interpret the results (strength and PRE interpretation). (20 points) Variable Description Current Coding reldiv Religious fractionalization From 0 to 1. Actual range: 0 – 0.86. wbgini Gini index, a quantified representation of a nation's Lorenz curve. A Gini index of 0% expresses perfect equality, while index of 100% expresses maximal inequality. (world bank) From 0 to 100. Actual range: 25.5 – 63.

https://sakai.unc.edu/access/content/attachment/a10477bb-6639-4d9b-89ba-7503599700b6/Assignments/c9df08b6-3489-4ee4-b006-8e1c406bf6e6/RELDIV.csv

Answer 1

The Gini coefficient was proposed by Gini as a measure of inequality of income or wealth. For OECD countries, in the late 20th century, considering the effect of taxes and transfer payments, the income Gini coefficient ranged between 0.24 and 0.49, with Slovenia being the lowest and Chile the highest. African countries had the highest pre-tax Gini coefficients in 2008–2009, with South Africa the world's highest, variously estimated to be 0.63 to 0.7, although this figure drops to 0.52 after social assistance is taken into account, and drops again to 0.47 after taxation. The global income Gini coefficient in 2005 has been estimated to be between 0.61 and 0.68 by various sources.

There are some issues in interpreting a Gini coefficient. The same value may result from many different distribution curves. The demographic structure should be taken into account. Countries with an aging population, or with a baby boom, experience an increasing pre-tax Gini coefficient even if real income distribution for working adults remains constant. Scholars have devised over a dozen variants of the Gini coefficient.