Because of in-kind transfers to the poor and because people's incomes vary from year to year and across their lifetimes, standard measures of income distribution exaggerate the degree of inequality in standards of living.

Question

Quizplus · Accepted Answer

In-kind transfers such as food stamps and Medicaid help reduce the actual level of inequality in standards of living, while income fluctuation over time further complicates the measurement of income distribution. Therefore, standard measures of income distribution tend to overestimate the degree of inequality.

Because of In-Kind Transfers to the Poor and Because People's