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An inequality measure for stochastic allocations

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  • Chew, Soo Hong
  • Sagi, Jacob S.
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    Abstract

    Few papers in the literature on inequality measurement deal with uncertainty, particularly when the ranking of cohorts may not be fixed. We present a set of axioms implying such a class of inequality measures under uncertainty that is a one-parameter extension of the generalized Gini mean over the distribution of average allocations. The extension consists of a quadratic term accounting for inter-personal correlations. In particular, our measure can simultaneously accommodate a preference for “shared destiny”, a preference for probabilistic mixtures over unfair allocations, and a preference for fairness “for sure” over fairness in expectation.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Theory.

    Volume (Year): 147 (2012)
    Issue (Month): 4 ()
    Pages: 1517-1544

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    Handle: RePEc:eee:jetheo:v:147:y:2012:i:4:p:1517-1544

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    Web page: http://www.elsevier.com/locate/inca/622869

    Related research

    Keywords: Income inequality; Social welfare; Utility theory; Risk; Uncertainty; Other regarding; Preference;

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    References

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    Cited by:
    1. Meyer, Margaret & Strulovici, Bruno, 2012. "Increasing interdependence of multivariate distributions," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1460-1489.
    2. Gajdos, Thibault & Weymark, John A., 2012. "Introduction to inequality and risk," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1313-1330.
    3. Margaret Meyer & Bruno Strulovici, 2013. "The Supermodular Stochastic Ordering," Discussion Papers 1563, Northwestern University, Center for Mathematical Studies in Economics and Management Science.

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