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The decomposition of inequality reconsidered: Weakly decomposable measures

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  • Udo Ebert

    (University of Oldenburg, Department of Economics)

Abstract

The paper characterizes the class of weakly decomposable (aggregable) inequality measures which satisfy a new (weak) decomposition (and agregation) property. These measures can be decomposed into the sum of the usual within-group and a between-group term which is based on the inequality between all pairs of individuals belonging to the groups involved. The measures therfore depend on the inequality index for two-person distributions and are proportional to the total sum of the inequality values between all pairs of individuals. Extending Gini's mean difference, the Gini coefficient, and the variance of logarithms we characterize three families of measures. By choosing other basic measures furhter (families of) weakly decomposable measures can be defined.

Suggested Citation

  • Udo Ebert, 2010. "The decomposition of inequality reconsidered: Weakly decomposable measures," Working Papers V-325-10, University of Oldenburg, Department of Economics, revised May 2010.
    • Handle: RePEc:old:dpaper:325
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    File URL: http://www.vwl.uni-oldenburg.de/download/V-325-10.pdf
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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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