n this subject suggests that productivity within a country grows when the population has incentives to work harder (or to work more). When the gap between rich and poor increases (an increase in I.R. form 1980-90, resulting in a larger ratio on the column I.R. 1990/1980), so does the population's eagerness to work, therefore increasing the Productivity Growth. Since when one variable goes up the other also goes up, there is a positive (or direct) correlation between the two. Mainstream economists use deductive reasoning to deduce that there exists a positive correlation between the two factors. In short, their hypothesis is that when the Income Ratio increases, the Productivity Growth also increases, since people are more motivated. For this to be true, we would expect a line going up and to the right on the graph, passing by Quadrants II and IV. Most points (80% or more) would have to be on these two Quadrants. This, however, is not the case (see graph), since only about 30.77% of the points plotted satisfy these conditions.Since the original hypothesis was rejected, we might want to see if there is a negative correlation between the two variables (that is, as one goes up, the other goes down). Our new hypothesis would then be "as the Income Ratio increases, the Productivity Growth decreases." Then, in the case of a high I.R., people in lower classes would rationally start to feel insecure and that their work is not being recognized by society, therefore losing motivation and producing less. In this case, since there's a negative correlation, one would expect the line on the graph to go downwards, from left to right, passing on Quadrants I and III. If this hypothesis were valid, 80%+ of the points would have to be on these Quadrants. This is also not the case, for only 69.32% of the points are on the appropriate Quadrants. Like the first, this second hypothesis also has to be rejected.After analyzing these two relationships and seeing ...
