Subject:
Economics
Material Type:
Module
Level:
Community College / Lower Division, College / Upper Division
Provider:
Ohio Open Ed Collaborative
Tags:
Language:
English
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Inequality, Poverty, and Economic Development: Course Map & Recommended Resources

Overview

This is very difficult set of topics to cover in one chapter. It is actually three topics! Instructors should choose one of these topics to cover and adjust the learning objectives accordingly. Inequality can be studied from the perspective of the US or between countries. The study of inequality would cover Learning objectives 1 and 3. Poverty is fundamentally about deprivation and should be understood as such. Deprivation can also intersect with inequality.  Economic Development is a contested term and its definition depends on the period and region that is being studied. Poverty and Economic Development together cover learning objective 2, 4 and 5.

Learning Objectives

(TAG 2, 16)

  1. Use the Lorenz curve and Gini coefficient to analyze inequality (16)

  2. Define poverty in absolute and relative terms (2)

  3. List factors that explain the persistence of poverty (16)

  4. Define what is meant by economic development (2)

  5. Explain economic development indices (measures) (2)

Supplemental Content/Alternative Resources

  1. Piketty, Thomas (2015). The long-run economics of wealth inequality Core-Econ <Video Online> https://youtu.be/ouhJrEcrCzQ
  2. Wilkinson, Richard (2011). “How economic inequality harms societies” TED <Video Online> https://youtu.be/cZ7LzE3u7Bw
  3. Alkire, Sabina (2017). “What is the Capability Approach to development?” Oxford Conversations <Video Online>  https://youtu.be/hZgsFd-huFw
  4. Cowen Tyler, and Alex Tabbarok (2015) “AmartyaSen #1 on Capabilities” Marginal Revolution University <Video Online> https://youtu.be/rKKs1rqdlmo
  5. McMillan, M. (2016). Understanding African Poverty over the Longue Duree: A Review of Africa’s Development in Historical Perspective. Journal of Economic Literature, 54(3), 893–905.
    • Abstract: The sixteen essays edited and synthesized by Emmanuel Akyeampong, Robert H. Bates, Nathan Nunn, and James A. Robinson contribute significantly to our understanding of the following questions: (1) When did Africa become poor? (2) Why did Africa become poor? (3) Why has Africa remained poor? Although these questions are impossible to answer in a definitive way, the partial explanations offered in this book are insightful and thought provoking and are summarized in this article. However, they also rest primarily on economic and political arguments. The importance of geography, which is mostly not explored in these essays, is reviewed in the final section of this article. (Learning Objective 3)
  6. Chang, Ha-Joon (editor). Rethinking development economics / Anthem Press, 2003. 
    • One only needs to read the introduction and the first chapter to get a good history of Economic Development and understand the heterodox critique of Development Economics.
       

Topic Exercise

Flipped Classroom: Students are asked to watch Richard Wilkinson’s video on how inequality and health outcomes are correlated (see reference above) the night before. In class, students will get into groups of 3-4 and pick a state or city in  the US. They should then find data and respond to the following questions.

The purpose of this exercise is to discover if inequality is linked to health outcomes in the US. Work in groups to answer the following.

  1. Goto the St Louis FRED Website and plot a graph of income inequality for a county or city of your choice in the United States. What is the income inequality measure you are using? Explain what you see.
  2. Goto the Center for Disease Control and Prevention's website called “Sortable Risk Factors and Health Indicators” <https://sortablestats.cdc.gov/Index.html#/ > Pick the same county, city, or state as you did in 1 above. Now select a health indicator such as Child Mortality, Suicide, or so on. Explain what you see.
  3. Do you think these two variables are correlated? Does correlation imply causality? Discuss.
  4. BONUS1: See if you can download the data and make a scatter plot. See this YouTube video to figure out how to produce a scatter plot. Vertex42 (2017). “Creating an XY Scatter Plot in Google Sheets” <https://www.youtube.com/watch?v=YC1Is9YJX0k >
  5. BONUS2: Find Economic Research that has explored the connections you are interested in. Use Google Scholar to find journal articles.

 
An additional quantitative exercise can be found here:
Grawe, Nathan. “Exploring Economic Inequality with Data” in Starting Point: Teaching and Learning in Economics. < https://serc.carleton.edu/econ/quantitative_writing/examples/inequality.html >

  • This set of assignments exposes students to data pertaining to economic inequality in international and historical context. The first assignment asks students to use Lorenz Curves and Gini Coefficients to summarize inequality in income and taxes reported by the IRS. The second sends them to the United Nations Human Development Indicators page to find cross-country data on Gini Coefficients and some other development indicator which they hypothesize to be correlated with inequality. In the third assignment, students estimate wealth inequality from 1774 probate records and compare the result with estimates of 20th-century wealth inequality. These early assignments serve as "scaffolding" for the ultimate assignment-a thesis-driven argument supported by data drawn from one or more of the sources used here.

The purpose of this exercise is to discover if inequality is linked to health outcomes in the US. Work in groups to answer the following.

  1. Goto the St Louis FRED Website and plot a graph of income inequality for a county or city of your choice in the United States. What is the income inequality measure you are using? Explain what you see.
  2. Goto the Center for Disease Control and Prevention's website called “Sortable Risk Factors and Health Indicators” <https://sortablestats.cdc.gov/Index.html#/ > Pick the same county, city, or state as you did in 1 above. Now select a health indicator such as Child Mortality, Suicide, or so on. Explain what you see.
  3. Do you think these two variables are correlated? Does correlation imply causality? Discuss.
  4. BONUS1: See if you can download the data and make a scatter plot. See this YouTube video to figure out how to produce a scatter plot. Vertex42 (2017). “Creating an XY Scatter Plot in Google Sheets” <https://www.youtube.com/watch?v=YC1Is9YJX0k >
  5. BONUS2: Find Economic Research that has explored the connections you are interested in. Use Google Scholar to find journal articles.

Active Learning Exercise

  1. After asking students to do the above numerical exercise, have the groups present to the whole class. Suggest that they discuss the correlations as well as the challenges they faced in collecting the data and doing any of the bonus questions. Another option is to run this whole exercise in class as a Classroom Experiment in Groups. See Starting Point: Teaching and Learning in Economics for more information. < https://serc.carleton.edu/econ/experiments/index.html >
  2. An additional active learning exercises on inequality: Eizman, Galit Income Inequality in Starting Point: Teaching and Learning in Economics. https://serc.carleton.edu/econ/tbl-econ/activities/209568.htm