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Inequality Measurement Using ‘Norm Incomes’: Were Garvy And Paglin Onto Something After All?

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  • Stephen P. Jenkins
  • Michael O'Higgins

Abstract

The “norm income” approach to inequality measurement is based on a comparison of the observed income distribution with a reference distribution consistent with the socially desired minimum degree of inequality (and not the equal shares distribution). Garvy and Paglin suggested such an approach, and we show that their methods, suitably modified, are closely related to the multivariate methods recently proposed by Atkinson and Bourguignon. The advantage and disadvantages of a norm income approach are analyzed in detail.

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  • Stephen P. Jenkins & Michael O'Higgins, 1989. "Inequality Measurement Using ‘Norm Incomes’: Were Garvy And Paglin Onto Something After All?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 35(3), pages 265-282, September.
    • Handle: RePEc:bla:revinw:v:35:y:1989:i:3:p:265-282
    DOI: 10.1111/j.1475-4991.1989.tb00593.x
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    Cited by:

    1. Magdalou, Brice & Nock, Richard, 2011. "Income distributions and decomposable divergence measures," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2440-2454.
    2. Jurgen Faik & Uwe Fachinger, 2013. "The decomposition of well-being categories: An application to Germany," Working Papers 307, ECINEQ, Society for the Study of Economic Inequality.
    3. Fachinger, Uwe, 2002. "Sparfähigkeit und Vorsorge gegenüber sozialen Risiken bei Selbständigen: Einige Informationen auf der Basis der Einkommens- und Verbrauchsstichprobe 1998," Working papers of the ZeS 01/2002, University of Bremen, Centre for Social Policy Research (ZeS).
    4. Frank Cowell & Emmanuel Flachaire & Sanghamitra Bandyopadhyay, 2013. "Reference distributions and inequality measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(4), pages 421-437, December.
    5. Ingvild Alm s, 2008. "Equalizing Income Versus Equalizing Opportunity: A Comparison of the United States and Germany," LIS Working papers 476, LIS Cross-National Data Center in Luxembourg.
    6. Muszyńska Joanna & Wędrowska Ewa, 2018. "Income Inequality of Households in Poland: A Subgroup Decomposition of Generalized Entropy Measures," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 22(4), pages 43-64, December.

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