In the context of measuring inequality, the 'Palma Ratio' is defined as:
A. The ratio of the income share of the top 10 per cent to that of the bottom 40 per cent
B. The share of the middle 50 per cent only
C. The Gini coefficient multiplied by 100
D. The ratio of the top 1 per cent to the bottom 1 per cent
Answer: Option A
Solution (By JKSSB Mock Tests)
The Palma ratio is the ratio of the income share of the richest 10 per cent of the population to that of the poorest 40 per cent; it focuses on the tails of the distribution that account for most inequality.
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