The preliminary step in assessing the extent of inequality is to decide how to measure it. Different indices exist, each responding to a built-in "aversion to inequality", and the choice of the index to be used affects conclusions. Whilst there is not a "preferable" index, the family of General Entropy Measures presents some beneficial properties. Yet, indices belonging to this family are not ordinally equivalent when Lorenz curves intersect. Therefore, conclusions about the extent and the change in inequality are driven by the assumptions behind the index chosen. Although the ranking correlation between inequality indices, empirically tested, is very high, a distinction should be drawn between cases involving non-intersecting and intersecting Lorenz curves. In the latter case, the choice of the index is fundamental to assess the distributional change. Therefore, a composite analysis of inequality through a series of indices, each sensitive to different parts of the distribution, is always preferable because it gives more details on the type of inequality and where it is more concentrated.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Publisher Info
Paper provided by Trinity College Dublin, Department of Economics in its series Economics Technical Papers with number
987.
For technical questions regarding this item, or to correct its listing, contact: (Dylan Sutherland) The email address of this maintainer does not seem to be valid anymore. Please ask Dylan Sutherland to update the entry or send us the correct address..
Related research
Keywords:
Other versions of this item:
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
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.)