Income distributions and decomposable divergence measures
Inequality indices evaluate the divergence between the income distribution and the hypothetical situation where all individuals receive the mean income, and are unambiguously reduced by a Pigou–Dalton progressive transfer. This paper proposes a new approach to evaluate the divergence between any two income distributions, where the latter can be a reference distribution for the former. In the case where the reference distribution is perfectly egalitarian – and uniquely in this case – we assume that any progressive transfer reduces the divergence, and that the divergence can be additively separated into inequality and efficiency loss. We characterize the unique class of decomposable divergence measures consistent with these views. We derive the associated relative and absolute subclasses, and we illustrate the applicability of our results. This approach extends the generalized entropy studied in inequality measurement.
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.:
- Bossert, Walter, 1995.
"Redistribution mechanisms based on individual characteristics,"
Mathematical Social Sciences,
Elsevier, vol. 29(1), pages 1-17, February.
- Bossert W., 1996. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 31(1), pages 51-51, February.
- Bossert, W., 1993. "Redistribution Mechanisms Based on Individual Characteristics," Working Papers 9307, University of Waterloo, Department of Economics.
- Almås, Ingvild & Cappelen, Alexander W. & Lind, Jo Thori & Sørensen, Erik Ø. & Tungodden, Bertil, 2011.
"Measuring unfair (in)equality,"
Journal of Public Economics,
Elsevier, vol. 95(7-8), pages 488-499, August.
- George Garvy, 1952. "Inequality of Income: Causes and Measurement," NBER Chapters, in: Studies in Income and Wealth, Volume 15, pages 25-47 National Bureau of Economic Research, Inc.
- Esteban, J.M. & Ray, D., 1992.
"On the Measurement of Polarization,"
UFAE and IAE Working Papers
171.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Esteban, J. & Ray, D., 1993. "On the Measurement of Polarization," UFAE and IAE Working Papers 221.93, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Joan-Maria Esteban & Debraj Ray, 1991. "On the Measurement of Polarization," Boston University - Institute for Economic Development 18, Boston University, Institute for Economic Development.
- Fields, Gary S. & Ok, Efe A., 1996. "The Meaning and Measurement of Income Mobility," Journal of Economic Theory, Elsevier, vol. 71(2), pages 349-377, November.
- Amiel, Yoram & Cowell, Frank A., 1992. "Measurement of income inequality : Experimental test by questionnaire," Journal of Public Economics, Elsevier, vol. 47(1), pages 3-26, February.
- Fleurbaey, Marc, 1995. "Equality and responsibility," European Economic Review, Elsevier, vol. 39(3-4), pages 683-689, April.
- Kurt Devooght, 2008. "To Each the Same and to Each his Own: A Proposal to Measure Responsibility-Sensitive Income Inequality," Economica, London School of Economics and Political Science, vol. 75(298), pages 280-295, 05.
- Kristof Bosmans & Frank Cowell, 2009.
"The class of absolute decomposable inequality measures,"
LSE Research Online Documents on Economics
25434, London School of Economics and Political Science, LSE Library.
- Bosmans, Kristof & Cowell, Frank A., 2010. "The class of absolute decomposable inequality measures," Economics Letters, Elsevier, vol. 109(3), pages 154-156, December.
- Kristof Bosmans & Frank A Cowell, 2009. "The Class of Absolute Decomposable Inequality Measures," STICERD - Distributional Analysis Research Programme Papers 099, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Charles Blackorby & David Donaldson & Maria Auersperg, 1981. "A New Procedure for the Measurement of Inequality within and among Population Subgroups," Canadian Journal of Economics, Canadian Economics Association, vol. 14(4), pages 665-85, November.
- Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
- Paglin, Morton, 1975. "The Measurement and Trend of Inequality: A Basic Revision," American Economic Review, American Economic Association, vol. 65(4), pages 598-609, September.
- Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
- Cowell, Frank A, 1980. "On the Structure of Additive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 47(3), pages 521-31, April.
- Foster, James E. & Shneyerov, Artyom A., 2000. "Path Independent Inequality Measures," Journal of Economic Theory, Elsevier, vol. 91(2), pages 199-222, April.
- Cowell, Frank A, 1985. "Measures of Distributional Change: An Axiomatic Approach," Review of Economic Studies, Wiley Blackwell, vol. 52(1), pages 135-51, January.
- Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-20, July.
- Cowell, Frank A. & Kuga, Kiyoshi, 1981. "Additivity and the entropy concept: An axiomatic approach to inequality measurement," Journal of Economic Theory, Elsevier, vol. 25(1), pages 131-143, August.
- Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, vol. 52(6), pages 1369-85, November.
- James E. Foster & Artyom A. Shneyerov, 1999. "A general class of additively decomposable inequality measures," Economic Theory, Springer, vol. 14(1), pages 89-111.
When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:146:y:2011:i:6:p:2440-2454. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.