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The evolution of income inequality in the European Union during the period 1993-1996

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Author Info
Santiago Álvarez-García
Juan Prieto-Rodríguez
Rafael Salas

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Abstract

The objective of this work is to analyse the income inequality in the 15 EU countries during the convergence process to the Monetary Union, using the information contained in the European Community Household Panel, corresponding to the four first waves. Using the inverse second order stochastic dominance concept, an ordering of these countries has been carried out. Furthermore, this ranking allows one to determine if the differences among EU country members have increased or decreased during this particular period. Whether the inequality of income has diminished within and between countries over time was studied. Gini's generalized family indices proposed by Donaldson and Weymark ( Journal of Economic Theory 22 : 67-86, 1980 and 29 : 353-8, 1983) and Yitzhaki ( International Economic Review 24 : 617-28, 1983) have been used. This allows one to test the sensitivity of the results obtained to different degrees of inequality aversion and to different equivalence scales, taking into account household sizes.

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Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 36 (2004)
Issue (Month): 13 (July)
Pages: 1399-1408
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Handle: RePEc:taf:applec:v:36:y:2004:i:13:p:1399-1408

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  1. Cowell, Frank A. & Victoria-Feser, Maria-Pia, 1996. "Poverty measurement with contaminated data: A robust approach," European Economic Review, Elsevier, vol. 40(9), pages 1761-1771, December. [Downloadable!] (restricted)
  2. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February. [Downloadable!] (restricted)
  3. Rolf Aaberge, 2004. "Ranking Intersecting Lorenz Curves," CEIS Research Paper 45, Tor Vergata University, CEIS. [Downloadable!]
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  4. Muliere, Pietro & Scarsini, Marco, 1989. "A note on stochastic dominance and inequality measures," Journal of Economic Theory, Elsevier, vol. 49(2), pages 314-323, December. [Downloadable!] (restricted)
  5. Donaldson, David & Weymark, John A., 1983. "Ethically flexible gini indices for income distributions in the continuum," Journal of Economic Theory, Elsevier, vol. 29(2), pages 353-358, April. [Downloadable!] (restricted)
  6. Frank A Cowell & Emmanuel Flachaire, 2002. "Sensitivity of Inequality Measures to Extreme Values," STICERD - Distributional Analysis Research Programme Papers 60, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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