IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/halshs-01379229.html
   My bibliography  Save this paper

On the Measurement of Functional Income Distribution

Author

Listed:
  • Marco Ranaldi

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

The present paper proposes a theoretical framework to examine the relationship between the functional and personal distribution of income. To this end, it introduces the concept of inequality in income composition. Inequality in income composition is high when two different sources of income are separately earned by the top and the bottom of the income distribution. On the contrary, it is low when each individual has the same population share of the two sources. This article designs an indicator to measure income composition inequality, named income-factor concentration index. The sign of the indicator determines the condition of transmission for the rising share of income from any source to increase overall income inequality. This framework is then applied to several European countries on basis of EU-SILC data.

Suggested Citation

  • Marco Ranaldi, 2018. "On the Measurement of Functional Income Distribution," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01379229, HAL.
    • Handle: RePEc:hal:cesptp:halshs-01379229
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01379229v4
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-01379229v4/document
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. A. B. Atkinson, 2009. "Factor shares: the principal problem of political economy?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 25(1), pages 3-16, Spring.
    3. Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-1227, September.
    4. Atkinson, A B, 1997. "Bringing Income Distribution in from the Cold," Economic Journal, Royal Economic Society, vol. 107(441), pages 297-321, March.
    5. Frédéric Chantreuil & Alain Trannoy, 2013. "Inequality decomposition values: the trade-off between marginality and efficiency," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 83-98, March.
    6. Yitzhaki, Shlomo, 1994. "Economic distance and overlapping of distributions," Journal of Econometrics, Elsevier, vol. 61(1), pages 147-159, March.
    7. Graham Pyatt & Chau-nan Chen & John Fei, 1980. "The Distribution of Income by Factor Components," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(3), pages 451-473.
    8. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    9. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    10. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    11. Palma, J.G., 2011. "Homogeneous middles vs. heterogeneous tails, and the end of the ‘Inverted-U’: the share of the rich is what it's all about," Cambridge Working Papers in Economics 1111, Faculty of Economics, University of Cambridge.
    12. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. , Stone Center & Ranaldi, Marco, 2020. "Distributional Aspects of Economic Systems," SocArXiv n7wj4, Center for Open Science.
    2. Roberto Iacono & Marco Ranaldi, 2023. "The Evolution of Income Composition Inequality in Italy, 1989–2016," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(1), pages 124-149, March.
    3. Giacomo Gabbuti, 2018. "Labour Shares and Income Inequality: Insights from Italian Economic History, 1895-2015," HHB Working Papers Series 13, The Historical Household Budgets Project.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marco Ranaldi, 2016. "On the Measurement of Functional Income Distribution," Documents de travail du Centre d'Economie de la Sorbonne 16051, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    2. Stéphane Mussard & Françoise Seyte & Michel Terraza, 2006. "La décomposition de l’indicateur de Gini en sous-groupes : une revue de la littérature," Cahiers de recherche 06-11, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    3. Michele Giammatteo, 2007. "The bidimensional decomposition of inequality: A nested Theil approach," LIS Working papers 466, LIS Cross-National Data Center in Luxembourg.
    4. I. Josa & A. Aguado, 2020. "Measuring Unidimensional Inequality: Practical Framework for the Choice of an Appropriate Measure," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 541-570, June.
    5. Cecilia García-Peñalosa & Elsa Orgiazzi, 2013. "Factor Components of Inequality: A Cross-Country Study," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(4), pages 689-727, December.
    6. Stéphane Mussard & Michel Terraza, 2009. "Décompositions des mesures d'inégalité : le cas des coefficients de Gini et d'entropie," Recherches économiques de Louvain, De Boeck Université, vol. 75(2), pages 151-181.
    7. Ferreira, Francisco H. G., 2022. "The analysis of inequality in the Bretton Woods institutions," LSE Research Online Documents on Economics 116018, London School of Economics and Political Science, LSE Library.
    8. Jurkatis, Simon & Strehl, Wolfgang, 2014. "Gini decompositions and Gini elasticities: On measuring the importance of income sources and population subgroups for income inequality," Discussion Papers 2014/22, Free University Berlin, School of Business & Economics.
    9. St鰨ane Mussard & Patrick Richard, 2012. "Linking Yitzhaki's and Dagum's Gini decompositions," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 2997-3010, August.
    10. Neves Costa, Rita & Pérez-Duarte, Sébastien, 2019. "Not all inequality measures were created equal - The measurement of wealth inequality, its decompositions, and an application to European household wealth," Statistics Paper Series 31, European Central Bank.
    11. Magne Mogstad, 2007. "Measuring Income Inequality under Restricted Interpersonal Comparability," Discussion Papers 498, Statistics Norway, Research Department.
    12. Chiang, Yen-Sheng, 2015. "Inequality measures perform differently in global and local assessments: An exploratory computational experiment," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 437(C), pages 1-11.
    13. Chantreuil, Frédéric & Fourrey, Kévin & Lebon, Isabelle & Rebiere, Therese, 2020. "Decomposing US Income Inequality à La Shapley: Race Matters, but Gender Too," IZA Discussion Papers 12950, Institute of Labor Economics (IZA).
    14. St鰨ane Mussard & Luc Savard, 2012. "The Gini multi-decomposition and the role of Gini's transvariation: application to partial trade liberalization in the Philippines," Applied Economics, Taylor & Francis Journals, vol. 44(10), pages 1235-1249, April.
    15. Ilpo Suoniemi & Marja Riihelä & Risto Sullström, 2008. "Tax progressivity and recent evolution of the Finnish income inequality," Working Papers 246, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    16. Teixidó Figueras, Jordi & Duro Moreno, Juan Antonio, 2012. "Ecological Footprint Inequality: A methodological review and some results," Working Papers 2072/203168, Universitat Rovira i Virgili, Department of Economics.
    17. Cecilia Garcia Peñalosa & Orgiazzi, E., 2011. "GINI DP 12: Factor Components of Inequality. A Cross-Country Study," GINI Discussion Papers 12, AIAS, Amsterdam Institute for Advanced Labour Studies.
    18. SOLOGON Denisa & ALMEIDA Vanda & VAN KERM Philippe, 2019. "Accounting for the distributional effects of the 2007-2008 crisis and the Economic Adjustment Program in Portugal," LISER Working Paper Series 2019-05, Luxembourg Institute of Socio-Economic Research (LISER).
    19. Vani K. Borooah & John Mangan, 2012. "Measuring competitive balance in sports using generalized entropy with an application to English premier league football," Applied Economics, Taylor & Francis Journals, vol. 44(9), pages 1093-1102, March.
    20. Duro, Juan Antonio & Teixidó-Figueras, Jordi, 2013. "Ecological footprint inequality across countries: The role of environment intensity, income and interaction effects," Ecological Economics, Elsevier, vol. 93(C), pages 34-41.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-01379229. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.