Based on the concentration curves below, and given that this is a country with high income inequality, how
would you classify targeting of spending on these two social services in this hypothetical country? What can
you say about the magnitude of the concentration coefficients for social service A and social service B?
If you were informed that this was a developing country and that these two services refer to primary
healthcare and hospital-level healthcare respectively, which would you guess is primary healthcare and
which is hospital-level healthcare? Briefly substantiate.
To classify the targeting of spending on social services based on the concentration curves, we need to examine the shape and the position of the curves in relation to the diagonal line. However, since the concentration curves and their specific shapes are not provided in the question, we cannot provide a direct classification.
The concentration coefficient measures income inequality, and a higher concentration coefficient indicates a greater concentration of resources among higher-income individuals. Without the values of the concentration coefficients for social service A and social service B, we cannot make any statements about their magnitudes.
If we are informed that this hypothetical country is a developing country and that the two services refer to primary healthcare and hospital-level healthcare, we can make an educated guess about which service corresponds to each category.
In general, primary healthcare tends to be more accessible and affordable, catering to a larger proportion of the population, including those with lower incomes. Hospital-level healthcare, on the other hand, usually involves specialized and more costly services, potentially leading to a smaller proportion of the population utilizing it.
Given the high income inequality mentioned in the question, it is reasonable to assume that the service with a lower concentration coefficient (indicating a more equal distribution of usage) would likely correspond to primary healthcare, as it is directed towards a broader population base. The service with a higher concentration coefficient would then correspond to hospital-level healthcare, as it is more likely to be utilized by higher-income individuals who have greater access to resources.
It's important to note that without the specific shapes of the concentration curves or any numerical data, these are only educated guesses based on general patterns and assumptions about primary and hospital-level healthcare in developing countries with income inequality.