Inequality and quasi-concavity
AbstractWe discuss a property of quasi-concavity for inequality measures. Defining income distributions as relative frequency functions, this property says that a convex combination of any two given income distributions is weakly more unequal than the least unequal income distribution of the two. The quasi-concavity property is not essential to the idea of inequality comparisons in the sense of not being implied by the fundamental, i.e., Lorenz type, axioms on their own. However, it is shown that all inequality measures considered in the literature—i.e., the class of decomposable inequality measures and the class of normative inequality measures based on a social welfare function of the rank-dependent expected utility form—satisfy the property and even a stronger version). The quasi-concavity property is then shown to greatly reduce the possible inequality patterns over a much studied type of income growth process.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces0507.
Date of creation: Mar 2005
Date of revision:
Inequality; Quasi-Concavity; Growth; Rank-Dependent Expected Utility;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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