Trends in income inequality in New Zealand during the past 35 years

RESEARCH ESSAY TOPIC AND FOCUS
Examine trends in income inequality in New Zealand during the past 35 years.
Research and explain the reasons for the increase in income inequality between 1988 to
1998.
Explain the impact of high level of income inequality on equity and efficiency in New
Zealand and why market failure exists as a result.
Explain two possible key policies to reduce the level of income inequality in New
Zealand and evaluate its impact on an efficiency/equity trade-off.
In your research essay, you should:
• Explain trends in income inequality and how it has changed during the past 35 years.
• Illustrate the changes in the trends over the years using the appropriate economic model
(Lorenz curve).
• Investigate two (2) reasons for the increase in income inequality from 1988 to 1998.
• Explain how high levels of income inequality affects equity and efficiency in New Zealand
and why it leads to market failure.
• Select and explain two key policies to reduce the level of income inequality.
• Evaluate your selected policies and their impact on an efficiency/equity trade-off.

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