The richest 20 percent of households in Taiwan have disposable income averaging 6.39 times that of the poorest 20 percent of families, a gap that can be termed "moderate," according to a press release issued by the Cabinet's Directorate General of Budget, Accounting and Statistics yesterday.
In the press release, the directorate also noted that figures used in a story in a Chinese-language magazine last month, which reported that Taiwan's most well-heeled families were 61 times richer than the most impoverished ones, were "erroneous."
The directorate said the international indicator used for evaluating the allocation of income is the five-level method calculated based on the household disposable income or the Gini coefficient.
The Gini coefficient is a number between zero -- minimum inequality -- and one -- maximum inequality -- that measures the degree of inequality in the distribution of income in a given society.
The magazine, however, used a ten-level method calculated on personal income. This cannot be used to evaluate the gap between rich and poor, according to the directorate, since it does not include personal transfer payments and therefore is not the same as final disposable income -- ie, the money that people actually have to spend -- the press release said.
According to a survey of Taiwanese family incomes in 2001, the most affluent 20 percent were 6.39 times richer than the bottom 20 percent.
The Gini coefficient for the same period was 0.35, which is regarded as average. Taiwan has consistently kept its Gini coefficient at or below this level.
A level above 0.4 is generally regarded as showing too wide an income gap.
Compared with other countries, the difference of 6.39 times in 2001 was higher than the Netherlands (4.5 times) and Japan (4.8 times), but was lower than France (7.5 times), Singapore (9.3 times) and the US (9.7 times), according to the directorate.
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