We give in this note an overview of the way income inequality is approached in economics.\r\nWe first recall the basic properties that any inequality index is required to possess and\r\nwe insist on the distinction between the indices of relative inequality and the indices of\r\nabsolute inequality. We present next the ethical approach to inequality measurement and\r\nwe derive the Atkinson-Kolm-Sen (AKS) and the Kolm-Pollak (KP) families of indices.\r\nThe search for a consensus among general classes of indices leads us to the criteria of\r\nrelative Lorenz and absolute Lorenz dominances. Finally we briefly discuss the properties\r\nof decomposablity that allow one to measure the contribution to overall income\r\ninequality of the inequality attached to a particular subgroup of the population or to a\r\nparticular income source.
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Paper provided by Groupe de Recherche en Economie Théorique et Appliquée in its series Cahiers du GREThA with number
2009-06.
Find related papers by JEL classification: D30 - Microeconomics - - Distribution - - - General D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement