IDEAS home Printed from https://ideas.repec.org/a/ibf/gjbres/v4y2010i1p29-45.html
   My bibliography  Save this article

An Implied Income Inequality Index Using L1 Norm Estimation Of Lorenz Curve

Author

Listed:
  • Hamid Shahrestani
  • Bijan Bidabad

Abstract

Distribution of income is among the most important issues in welfare economics. Economic literature provides different ways to measure income inequality. Most common inequality indices provide information about the income distribution and analyze the inequality of income allocation without any reference to the amount of money needed to reduce the income inequality.In this paper, we design a model to estimate the Lorenz curve function parameters. By this approach, any census summary data can be used to measure the distribution of income. We also introduce a new fiscal-compensation-based index for reduction of the degree of inequality. Using this index, we show how much transfer payment is needed to achieve the desired distribution of income consistent with the perceived economic goals of the society.

Suggested Citation

  • Hamid Shahrestani & Bijan Bidabad, 2010. "An Implied Income Inequality Index Using L1 Norm Estimation Of Lorenz Curve," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 4(1), pages 29-45.
    • Handle: RePEc:ibf:gjbres:v:4:y:2010:i:1:p:29-45
    as

    Download full text from publisher

    File URL: http://www.theibfr2.com/RePEc/ibf/gjbres/gjbr-v4n1-2010/GJBR-V4N1-2010-3.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kakwani, Nanak, 1980. "Functional Forms for Estimating the Lorenz Curve: A Reply," Econometrica, Econometric Society, vol. 48(4), pages 1063-1064, May.
    2. Kakwani, Nanak C & Podder, N, 1976. "Efficient Estimation of the Lorenz Curve and Associated Inequality Measures from Grouped Observations," Econometrica, Econometric Society, vol. 44(1), pages 137-148, January.
    3. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guglielmo D’Amico & Giuseppe Di Biase & Raimondo Manca, 2011. "Immigration Effects On Economic Systems Through Dynamic Inequality Indices," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 5(5), pages 11-25.
    2. Guglielmo D’Amico & Giuseppe Di Biase & Raimondo Manca, 2015. "Measuring Income Inequality: An Application Of The Population Dynamic Theil'S Entropy," Accounting & Taxation, The Institute for Business and Finance Research, vol. 7(1), pages 103-114.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francois, Joseph & Rojas-Romagosa, Hugo, 2005. "The Construction and Interpretation of Combined Cross-Section and Time-Series Inequality Datasets," CEPR Discussion Papers 5214, C.E.P.R. Discussion Papers.
    2. Luljeta Hajderllari & Kostas Karantininis, 2012. "The structural changes of the food industry in the European Union," IFRO Working Paper 2012/8, University of Copenhagen, Department of Food and Resource Economics.
    3. Miguel Sordo & Jorge Navarro & José Sarabia, 2014. "Distorted Lorenz curves: models and comparisons," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(4), pages 761-780, April.
    4. Peter Saunders, 1993. "Longer Run Changes in the Distribution of Income in Australia," The Economic Record, The Economic Society of Australia, vol. 69(4), pages 353-366, December.
    5. Ferreira, Luisa, 1996. "Poverty and inequality during structural adjustment in rural Tanzania," Policy Research Working Paper Series 1641, The World Bank.
    6. Louis Mesnard, 2022. "About some difficulties with the functional forms of Lorenz curves," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 939-950, December.
    7. David Murray, 1981. "The Inequality of Household Incomes in Australia," The Economic Record, The Economic Society of Australia, vol. 57(1), pages 12-22, March.
    8. Nanak Kakwani, 1978. "Taxation in an Inflationary Economy: A Note," The Economic Record, The Economic Society of Australia, vol. 54(1), pages 140-142, April.
    9. Gholamreza Hajargasht & William E. Griffiths, 2016. "Inference for Lorenz Curves," Department of Economics - Working Papers Series 2022, The University of Melbourne.
    10. Herrerías Pleguezuelo, R. & García Fernández, R. Mª, 2001. "Un análisis de la desigualdad de la renta entre las provincias andaluzas, a partir de los datos de la E.B.P.F. y de renta corregidos (1990-91), utilizando estimaciones de combinaciones lineales convex," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 19, pages 21-36, Diciembre.
    11. ZuXiang Wang & Yew-Kwang Ng & Russell Smyth, 2007. "Revisiting The Ordered Family Of Lorenz Curves," Monash Economics Working Papers 19-07, Monash University, Department of Economics.
    12. Florencia Lopez Boo, 2006. "Changes in poverty and the stability of income distribution in Argentina: evidence from the 1990s via decompositions," Working Papers 33, ECINEQ, Society for the Study of Economic Inequality.
    13. Rukmani Gounder & Zhongwei Xing, 2012. "The measurement of inequality in Fiji's household income distribution," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(4), pages 264-280, March.
    14. Ashantha Ranasinghe & Xuejuan Su, 2023. "When social assistance meets market power: A mixed duopoly view of health insurance in the United States," Economic Inquiry, Western Economic Association International, vol. 61(4), pages 851-869, October.
    15. Gajdos, Thibault & Maurin, Eric, 2004. "Unequal uncertainties and uncertain inequalities: an axiomatic approach," Journal of Economic Theory, Elsevier, vol. 116(1), pages 93-118, May.
    16. Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, vol. 54(3), pages 339-359, July.
    17. Alain Chateauneuf & Patrick Moyes, 2005. "Lorenz non-consistent welfare and inequality measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(2), pages 61-87, January.
    18. Roobavannan, M. & Kandasamy, J. & Pande, S. & Vigneswaran, S. & Sivapalan, M., 2020. "Sustainability of agricultural basin development under uncertain future climate and economic conditions: A socio-hydrological analysis," Ecological Economics, Elsevier, vol. 174(C).
    19. Oscar Volij, 2018. "Segregation: theoretical approaches," Chapters, in: Conchita D’Ambrosio (ed.), Handbook of Research on Economic and Social Well-Being, chapter 21, pages 480-503, Edward Elgar Publishing.
    20. Alessandro Spiganti, 2022. "Wealth Inequality and the Exploration of Novel Alternatives," Working Papers 2022:02, Department of Economics, University of Venice "Ca' Foscari".

    More about this item

    Keywords

    Income distribution; Inequality index; Lorenz curve;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibf:gjbres:v:4:y:2010:i:1:p:29-45. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mercedes Jalbert (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.