Economics | Income Distribution


This paper attempts to analyze and isolate the effects of income inequality on the difference between poverty rates amongst the Black and White population by state in 2010, using each state’s GINI coefficient estimate as the inequality measurement. In addition, the author proposes an alternative income distribution measurement to try and further interpret the effects of a particular state’s income allocation on its poverty rate differential. This paper will also discuss, and attempt to quantify, other factors that could affect disparity in poverty rates between Black and White Americans, such as incarceration rates. The author finds that there is some evidence that a higher state GINI coefficient corresponded with a smaller magnitude of difference between Black and White poverty rates, while a higher variance in allocation amongst income brackets corresponded with an increase in the magnitude of the poverty rate differential.