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Linear Measures, the Gini Index, and The Income-Equality Trade-off

Author

Listed:
  • Itzhak Gilboa

    (Northwestern University [Evanston])

  • Elchanan Ben Porath

    (Northwestern University [Evanston], TAU - Tel Aviv University)

Abstract

This paper provides an axiomatization of linear inequality measures representing binary relations on the subspace of income profiles having identical total income. Interpreting the binary relation as a policymaker′s preference, we extend the axioms to the whole space and find that they characterize linear social evaluation functions. The axiomatization seems to suggest that a policymaker who has a linear measure of inequality on a subspace should have a linear evaluation on the whole space. An extension of the preferences reflected in the Gini index to the whole space is represented by a linear combination of total income and the Gini index.

Suggested Citation

  • Itzhak Gilboa & Elchanan Ben Porath, 1994. "Linear Measures, the Gini Index, and The Income-Equality Trade-off," Post-Print hal-00481365, HAL.
    • Handle: RePEc:hal:journl:hal-00481365
    DOI: 10.1006/jeth.1994.1076
    as

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