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On the Measurement of Intermediate Inequality: A Dominance Criterion for a Ray-Invariant Notion

In: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting

Author

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  • Francisco Azpitarte
  • Olga Alonso-Villar

Abstract

This paper introduces a unit-consistent Lorenz dominance criterion that allows ranking income distributions according to centrist measures à la Seidl and Pfingsten (1997). In doing so, it definesα-Lorenz curves that generalize the absolute Lorenz curve. These curves allow implementing unanimous rankings for a broad set of centrist inequality notions, whereas they become closer and closer to the absolute curve whenαapproaches equity. In addition, this paper provides an empirical illustration of these tools using Australian income data. The results suggest that despite the reduction of relative inequality for Australian-born people between 1999 and 2003, their inequality increased for most centrist value judgments.

Suggested Citation

  • Francisco Azpitarte & Olga Alonso-Villar, 2014. "On the Measurement of Intermediate Inequality: A Dominance Criterion for a Ray-Invariant Notion," Research on Economic Inequality, in: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting, volume 22, pages 401-420, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:reinzz:s1049-258520140000022013
    DOI: 10.1108/S1049-258520140000022013
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    Citations

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    Cited by:

    1. Claudio Zoli, 2018. "A Note on Progressive Taxation and Inequality Equivalence," Research on Economic Inequality, in: Inequality, Taxation and Intergenerational Transmission, volume 26, pages 15-33, Emerald Group Publishing Limited.

    More about this item

    Keywords

    Income distribution; Lorenz dominance; intermediate inequality indices; Ray-invariance; Australia; D63;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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