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Intersecting generalized Lorenz curves and the Gini index

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  • Claudio Zoli

    (Department of Economics, University of Bologna, Bologna, Italy)

Abstract

As is well known, the use of the Gini coefficient in comparisons is inconsistent with an utilitarian approach. This paper analyzes the Gini coefficient's normative significance in welfare comparisons evaluating income distributions according to Yaari dual social welfare function. When generalized Lorenz curves cross once, the Gini coefficient is decisive in determining welfare rankings if we strengthen the Principle of Transfers applying a Positional version of the Principle of Transfer Sensitivity. This result can also be extended to the case of multiple crossings.

Suggested Citation

  • Claudio Zoli, 1999. "Intersecting generalized Lorenz curves and the Gini index," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(2), pages 183-196.
  • Handle: RePEc:spr:sochwe:v:16:y:1999:i:2:p:183-196
    Note: Received: 28 August 1996 / Accepted: 22 October 1997
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