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Lorenz Dominance and the Variance of Logarithms

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Author Info
Ok, Efe A.
Foster, James

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Abstract

The variance of logarithms is a widely used inequality measure which is well known to disagree with the Lorenz criterion. Up to now, the extent and likelihood of this inconsistency were thought to be vanishingly small. We find that this view is mistaken : the extent of the disgreement can be extremely large; the likelihood is far from negligible.

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Paper provided by C.V. Starr Center for Applied Economics, New York University in its series Working Papers with number 97-22.

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Length: 17 pages
Date of creation: 1997
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Handle: RePEc:cvs:starer:97-22

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Postal: C.V. Starr Center, Department of Economics, New York University, 19 W. 4th Street, 6th Floor, New York, NY 10012
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Keywords: STATISTICS ; MEASUREMENT;

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Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 813-34, August.
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  3. Creedy, John & Gemmell, Norman, 1984. "Income Redistribution through Taxes and Transfers in Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 31(1), pages 44-59, February.
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  6. Card, David & Lemieux, Thomas, 1994. "Changing Wage Structure and Black-White Wage Differentials," American Economic Review, American Economic Association, vol. 84(2), pages 29-33, May. [Downloadable!] (restricted)
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  8. Bénabou, Roland, 1996. "Unequal Societies," CEPR Discussion Papers 1419, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  9. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September. [Downloadable!] (restricted)
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  11. Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April. [Downloadable!] (restricted)
  12. Heckman, James J & Honore, Bo E, 1990. "The Empirical Content of the Roy Model," Econometrica, Econometric Society, vol. 58(5), pages 1121-49, September. [Downloadable!] (restricted)
  13. Sawyer, Malcom C, 1979. "The Variance of Logarithms and Industrial Concentration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(2), pages 165-81, May.
  14. Gastwirth, Joseph L, 1971. "A General Definition of the Lorenz Curve," Econometrica, Econometric Society, vol. 39(6), pages 1037-39, November. [Downloadable!] (restricted)
  15. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Peter J. Lambert & Giuseppe Lanza, 2003. "The effect on inequality of changing one or two incomes," IFS Working Papers W03/15, Institute for Fiscal Studies. [Downloadable!]
  2. Peter J. Lambert & Giuseppe Lanza, 2003. "The Effect on Inequality of Changing One or Two Incomes," University of Oregon Economics Department Working Papers 2003-15, University of Oregon Economics Department, revised 10 Sep 2003. [Downloadable!]
  3. Subramanian, S., 2004. "Indicators of Inequality and Poverty," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  4. Hipolito , Simon, 2008. "International Differences in Wage Inequality: A New Glance with European Matched Employer-Employee Data," MPRA Paper 7932, University Library of Munich, Germany. [Downloadable!]
  5. Christophe Muller, 2005. "Defining Poverty Lines As A Fraction Of Central Tendency," Working Papers. Serie AD 2005-13, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
    Other versions:
  6. Peter Lambert & Giuseppe Lanza, 2006. "The effect on inequality of changing one or two incomes," Journal of Economic Inequality, Springer, vol. 4(3), pages 253-277, December. [Downloadable!] (restricted)
  7. Goerlich, Francisco J. & Mas, Matilde, 2000. "Further Evidence On Spanish Regional Convergence (Per Capita Income Versus Welfare, Are They So Different?)," ERSA conference papers ersa00p399, European Regional Science Association. [Downloadable!]
  8. Ioannis Cholezas & Panos Tsakloglou, 2007. "Earnings Inequality in Europe: Structure and Patterns of Inter-Temporal Changes," IZA Discussion Papers 2636, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Christophe Muller, 2001. "The Properties of the Watts Poverty Index under Lognormality," Economics Bulletin, Economics Bulletin, vol. 9, pages 1-9. [Downloadable!]
  10. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January. [Downloadable!] (restricted)
    Other versions:
  11. Satya R. Chakravarty & Pietro Muliere, 2003. "Welfare indicators: A review and new perspectives. 1. Measurement of inequality," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 457-497. [Downloadable!]
  12. Christophe Muller, 2004. "Poverty And Inequality Under Income And Price Dispersions," Working Papers. Serie AD 2004-35, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
    Other versions:
  13. Hipólito Simón, 2009. "La desigualdad salarial en España: Una perspectiva internacional y temporal," Investigaciones Economicas, Fundación SEPI, vol. 33(3), pages 439-471, September. [Downloadable!]
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