Using the method below, calculate the Gini coefficient for the economy. Next, describe a regressive transfer and explain what possible changes would result from this transfer for the Lorenz curve and the Gini coefficient.

Hand-Calculating the Gini: Intuition . Gini Coefficient is the average of all possible pair-wise comparisons of income for people in the population, normalized by the mean income. . If everybody has the same income, this average will be 0. . As income differences between people get bigger, the larger Gini getsHand-Calculating the Gini: Steps 1. Calculate (absolute value of) all possible pairwise comparisons between people 2. Calculate the sum of these pairwise comparisons 3. Divide this average by mean income in the society 4. Divide this by 2 (to account for double-counting) 5. Divide this by the number of people in the society squared I'm G = j=1 ZK=Ininkly; - ykl 2 un2