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Comparing Income Distributions Using Atkinson's Measure of Inequality

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  • John Creedy

Abstract

This article is aimed at undergraduate and graduate economics students, and public sector economists, who are interested in inequality measurement. It examines the use of the Atkinson inequality measure to compare income distributions. A major feature of this measure is that distributional value judgements are made explicit, via the use of a particular form of social welfare function. Emphasis is given to the interpretation of changes in inequality and the role of the relative inequality aversion parameter, which reflects an important feature of those value judgements.

Suggested Citation

  • John Creedy, 2023. "Comparing Income Distributions Using Atkinson's Measure of Inequality," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 56(1), pages 141-155, March.
    • Handle: RePEc:bla:ausecr:v:56:y:2023:i:1:p:141-155
    DOI: 10.1111/1467-8462.12499
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    1. Hoffmann, Rodolfo, 2001. "Effect of the rise of a person's income on inequality," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 21(2), November.
    2. John Creedy, 2016. "Interpreting inequality measures and changes in inequality," New Zealand Economic Papers, Taylor & Francis Journals, vol. 50(2), pages 177-192, August.
    3. Thistle, Paul D, 1990. "Large Sample Properties of Two Inequality Indices," Econometrica, Econometric Society, vol. 58(3), pages 725-728, May.
    4. Creedy, John, 2019. "The Atkinson Inequality Measure and Inequality Aversion," Working Paper Series 8015, Victoria University of Wellington, Chair in Public Finance.
    5. Nazila Alinaghi & John Creedy & Norman Gemmell, 2020. "The Redistributive Effects of a Minimum Wage Increase in New Zealand: A Microsimulation Analysis," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(4), pages 517-538, December.
    6. S. Subramanian, 2002. "An Elementary Interpretation of the Gini Inequality Index," Theory and Decision, Springer, vol. 52(4), pages 375-379, June.
    7. Creedy, John, 2019. "The Atkinson Inequality Measure and Inequality Aversion," Working Paper Series 20918, Victoria University of Wellington, Chair in Public Finance.
    8. John Creedy, 2017. "A note on inequality-preserving distributional changes," New Zealand Economic Papers, Taylor & Francis Journals, vol. 51(1), pages 86-95, January.
    9. Alejandro Corvalan, 2014. "The Impact of a Marginal Subsidy on Gini Indices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 596-603, September.
    10. Peter Lambert & Giuseppe Lanza, 2006. "The effect on inequality of changing one or two incomes," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(3), pages 253-277, December.
    11. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    12. Yoram Amiel & John Creedy & Stan Hurn, 1999. "Measuring Attitudes Towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
    13. John Creedy, 2017. "Alternative Distributions for Inequality Comparisons," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 50(4), pages 484-497, December.
    14. D. J. Aigner & A. J. Heins, 1967. "A Social Welfare View Of The Measurement Of Income Equality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 13(1), pages 12-25, March.
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    Cited by:

    1. John Creedy, 2023. "Distributional Comparisons Using the Gini Inequality Measure," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 56(4), pages 538-550, December.

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