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A graph-based approach to inequality assessment

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  • Palestini, Arsen
  • Pignataro, Giuseppe

Abstract

In a population consisting of heterogeneous types, whose income factors are indicated by nonnegative vectors, policies aggregating different factors can be represented by coalitions in a cooperative game, whose characteristic function is a multi-factor inequality index. When it is not possible to form all coalitions, the feasible ones can be indicated by a graph. We redefine Shapley and Banzhaf values on graph games to deduce some properties involving the degrees of the graph vertices and marginal contributions to overall inequality. An example is finally provided based on a modified multi-factor Atkinson index.

Suggested Citation

  • Palestini, Arsen & Pignataro, Giuseppe, 2016. "A graph-based approach to inequality assessment," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 455(C), pages 65-78.
  • Handle: RePEc:eee:phsmap:v:455:y:2016:i:c:p:65-78
    DOI: 10.1016/j.physa.2016.03.001
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    References listed on IDEAS

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    Keywords

    Graph theory; Inequality; Policy; Atkinson index;

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