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Reference distributions and inequality measurement

Author

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  • Frank Cowell
  • Emmanuel Flachaire
  • Sanghamitra Bandyopadhyay

Abstract

We investigate a general problem of comparing pairs of distributions which includes approaches to inequality measurement, the evaluation of “unfair” income inequality, evaluation of inequality relative to norm incomes, and goodness of fit. We show how to represent the generic problem simply using (1) a class of divergence measures derived from a parsimonious set of axioms and (2) alternative types of “reference distributions.” The problems of appropriate statistical implementation are discussed and empirical illustrations of the technique are provided using a variety of reference distributions. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • 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.
    • Handle: RePEc:kap:jecinq:v:11:y:2013:i:4:p:421-437
    DOI: 10.1007/s10888-012-9238-z
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    Cited by:

    1. Domenico Moramarco & Bram De Rock, 2022. "Nonparametric analysis of heterogeneous multidimensional fairness," Working Papers 621, ECINEQ, Society for the Study of Economic Inequality.
    2. Frank A. Cowell & Emmanuel Flachaire, 2014. "Statistical Methods for Distributional Analysis," Working Papers halshs-01115996, HAL.
    3. Nicholas Rohde, 2016. "J-divergence measurements of economic inequality," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 847-870, June.
    4. Frank Cowell & Emmanuel Flachaire, 2021. "Inequality Measurement: Methods and Data," Post-Print hal-03589066, HAL.
    5. Jarosław Oczki & Ewa Wędrowska, 2017. "Changes in Household Income Distributions in EU Countries," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 45, pages 299-314.

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    More about this item

    Keywords

    Divergence measures; Generalised entropy measures; Income distribution; Inequality measurement; D63; C10;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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