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- One common way of measuring income inequality is to rank all households by income, from lowest to highest, and then to divide all households into five groups with equal numbers of people, known as quintiles1. This calculation allows for measuring the distribution of income among the five groups compared to the total. To calculate the percentage of total income each segment makes, we can do a straightforward part-over-whole calculation of each segment's earnings2. The formula to calculate distributable net income is: Distributable Net Income (DNI) = Taxable Income - Capital Gains + Tax Exemption3.Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.One common way of measuring income inequality is to rank all households by income, from lowest to highest, and then to divide all households into five groups with equal numbers of people, known as quintiles. This calculation allows for measuring the distribution of income among the five groups compared to the total.learn.saylor.org/mod/book/view.php?id=31170&cha…In order to look at income distribution, we need to see what percentage of total income each segment makes, rather than the actual amount of money each makes. Since each of the segments is equal in size, we don't need to worry about weighting the average incomes, and can do a straightforward part-over-whole calculation of each segment's earnings.www.sparknotes.com/economics/micro/incomedistr…The formula to calculate the figure is as follows: Distributable Net Income (DNI) = Taxable Income - Capital Gains + Tax Exemption In instances where there are capital losses, that figure replaces the capital gains and is added to the formula instead of subtracted.www.investopedia.com/terms/d/distributablenetinco…
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