Inequality measurement and the leaky-bucket paradox
The transfer principle requires inequality measures to decrease for mean preserving contractions. How much leakage of transfers can preserve inequality? Conditions are shown for leaky transfers to preserve inequality. We find that positive remainders with positive or negative leakage as well as negative remainders with positive leakage may occur. This constitutes the leaky-bucket paradox.
Volume (Year): 4 (2001)
Issue (Month): 6 ()
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- Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
- Creedy, J. & Hurn, S., 1998. "Distributional Preferences and the Extended Gini Measures of Inequality," Department of Economics - Working Papers Series 619, The University of Melbourne.
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