GDP per Capita (approximate)
Another sign of economic growth relates to income distribution, or how the wealth of a country is divided up. In most societies, in the present as well as in the past, just a few people possess great wealth, whereas most people are poor. Many modern democracies work to distribute wealth more equally through a variety of means, including welfare. But even in some democracies, including the United States, the richest people have far more money than the poorest.
Equity occurs when an economic transaction is fair to all those involved. Although not the same as equal income distribution, equity is an important part of a fair economy.
Most governments have laws and policies designed to ensure equity. Without such policies, many people would not engage in economic activity.
Measuring income distribution is difficult. Simply measuring the average (mean) income can be misleading because extremes on either end skew the results. Nevertheless, analysts measure the median income to get a more accurate assessment of how the typical citizen fares because exactly one-half of people are below the median and one-half are above. Another way to measure income distribution is to examine wealth in quintiles (groups of 20 percent). For example, analysts might compare the amount of money owned by the richest 20 percent of the population with the amount of money owned by the poorest 20 percent.