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The Theil Index in Sequences of Nested and Hierarchic Grouping Structures: Implications for the Measurement of Inequality through Time, with Data Aggregated at Different Levels of Industrial Classification

Author

Listed:
  • Pedro Conceicao

    (Institut Superior Tecnico, Lisbon)

  • James K. Galbraith

    (LBJ School of Public Affairs, University of Texas at Austin)

  • Peter Bradford

    (IBM Corporation)

Abstract

This paper deepens and extends the conclusion by Conceição and Galbraith [2000] that, under some very general conditions, the dynamics of overall inequality can be captured using only the between sector component of the Theil index. This paper explores the fractal properties of the Theil index, and presents a more compelling empirical illustration. The fractal property of the Theil index results directly from its characteristic of perfect decomposability, which allows for the separation of inequality into between- and a within-groups components, provided that the groups are mutually exclusive and completely

Suggested Citation

  • Pedro Conceicao & James K. Galbraith & Peter Bradford, 2001. "The Theil Index in Sequences of Nested and Hierarchic Grouping Structures: Implications for the Measurement of Inequality through Time, with Data Aggregated at Different Levels of Industrial Classific," Eastern Economic Journal, Eastern Economic Association, vol. 27(4), pages 491-514, Fall.
    • Handle: RePEc:eej:eeconj:v:27:y:2001:i:4:p:491-514
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    Citations

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    Cited by:

    1. Mohtadi, Soran & Castells-Quintana, David, 2021. "The distributional dimension of the resource curse: Commodity price shocks and income inequality," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 63-78.
    2. Bhattacharya, Joysankar & Sinha, Avik, 2016. "Inequality in Per Capita Water Availability: A Theil’s Second Measure Approach," MPRA Paper 100016, University Library of Munich, Germany.
    3. Vogel, Sebastian & Meyr, Herbert, 2015. "Decentral allocation planning in multi-stage customer hierarchies," European Journal of Operational Research, Elsevier, vol. 246(2), pages 462-470.
    4. Carlton, Justin & Burris, Mark, 2014. "Comprehensive Equity Analysis of Mileage-Based User Fees: Taxation and Expenditures for Roadways and Transit," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 53(2).
    5. Gil-Alana, Luis A. & Škare, Marinko & Pržiklas-Družeta, Romina, 2019. "Measuring inequality persistence in OECD 1963–2008 using fractional integration and cointegration," The Quarterly Review of Economics and Finance, Elsevier, vol. 72(C), pages 65-72.
    6. Miśkiewicz, Janusz, 2010. "Entropy correlation distance method. The Euro introduction effect on the Consumer Price Index," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(8), pages 1677-1687.
    7. Avik, Sinha & Siddhartha K., Rastogi, 2015. "Inequality in Access to Improved Water Source: A Regional Analysis by Theil Index," MPRA Paper 101799, University Library of Munich, Germany, revised 2015.
    8. Miśkiewicz, Janusz, 2008. "Globalization — Entropy unification through the Theil index," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(26), pages 6595-6604.

    More about this item

    Keywords

    Inequality;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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