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Multifactor Inequality: Substitution Effects for Income Sources in Mexico

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  • Maria Elena Garcia Reyes

    (University of York)

Abstract

Income is a poor indicator of welfare and should be use only as a as component of welfare. Wealth provides another dimension of well-being. We use the Kullback-Leibler Information Criterion (KLIC, hereafter) as a measure of the discrepancy between two attributes. This will allow economists and researchers to understand the kind of relationship that the attributes hold. The applications deals with an unusual analysis of income factors in which we treat them as different attributes. This allows us to estimate the substitution effects among income factors.

Suggested Citation

  • Maria Elena Garcia Reyes, 2006. "Multifactor Inequality: Substitution Effects for Income Sources in Mexico," Working Papers 31, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2006-31
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2006-31.pdf
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    References listed on IDEAS

    as
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    6. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
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    8. Maasoumi, Esfandiar, 1986. "The Measurement and Decomposition of Multi-dimensional Inequality," Econometrica, Econometric Society, vol. 54(4), pages 991-997, July.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    entropy; cross-entropy; KLIC; multi-attribute; multifactor; welfare matrix; Theil index; Gini index;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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