4.5.2 Income Distribution and Inequalities

Meaning: how total income (or consumption) is shared among the population. Measurement(the exam core):• Lorenz curve — cumulative % of population (x) vs cumulative % of income (y): the 45° line = perfect equality; the curve's bow away from it = inequality;• Gini coefficient = area between the line and the curve ÷ total triangle area: 0 = perfectequality, 1 = perfect inequality. Nepal's consumption Gini sits in the low-to-mid 0.30s — moderate by regional standards, with urban inequality rising;• Quintile/decile ratios (top 10%'s share vs bottom 10%'s). Causes: unequal asset ownership (land above all — historically birta/jagir concentrated holdings; landlessness maps onto caste — Sociology 7.6); unequal education; wage dualism (formal vs informal); remittance capture (some households, not all — migration's inequality effects run both directions); urban agglomeration; and discrimination. Why inequality matters (law angle): it corrodes equality of opportunity, political voice and the rule of law itself — which is why Nepal's Constitution treats economic equality (progressive taxation, land policy, inclusion) as constitutional business, not just economic policy.