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On the Measurement of Indignation

  • Paul Makdissi

    ()

    (Department of Economics, University of Ottawa, 120 University St., Ottawa,Ontario)

  • Myra Yazbeck

    ()

    (CIRPÉE and Department of Epidemiology Biostatistics and Occupational Health, McGill University, Montreal, Canada,)

Recently, a lot of attention is given to income variations occurring at the top of the income distribution. “What happens to the top 1%?” is a question of crucial importance on the political level (Occupy Wall Street Movement) as well as on income inequality measurement level. Despite this increased interest, there is no rigorous measurement framework available in the literature for the measurement of “indignation”. To fill this gap, this paper proposes a simple framework for the measurement of indignation. It exposes the ethical principles underlying an indignation index and develops restricted positional dominance conditions that produce robust orderings of indignation between income distributions. It also proposes a parametric class of indignation indices that may be used to produce complete orderings when the restricted positional dominance tests do not lead to satisfactory orderings. Finally, the paper offers a brief empirical illustration using the World Top Incomes Database.

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File URL: http://www.socialsciences.uottawa.ca/sites/default/files/public/eco/1213e.pdf
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Paper provided by University of Ottawa, Department of Economics in its series Working Papers with number 1213E.

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Length: 19 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:ott:wpaper:1213e
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  1. Nicole Fortin & David A. Green & Thomas Lemieux & Kevin Milligan & W. Craig Riddell, 2012. "Canadian Inequality: Recent Developments and Policy Options," Canadian Public Policy, University of Toronto Press, vol. 38(2), pages 121-145, June.
  2. Aaberge, Rolf, 2008. "Ranking Intersecting Lorenz Curves," IZA Discussion Papers 3852, Institute for the Study of Labor (IZA).
  3. Fabien Dell, 2005. "Top Incomes in Germany and Switzerland Over the Twentieth Century," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 412-421, 04/05.
  4. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
  5. Paul Makdissi & Stéphane Mussard, 2008. "Analyzing the impact of indirect tax reforms on rank-dependent social welfare functions: a positional dominance approach," Social Choice and Welfare, Springer, vol. 30(3), pages 385-399, April.
  6. Claudio Zoli, 1999. "Intersecting generalized Lorenz curves and the Gini index," Social Choice and Welfare, Springer, vol. 16(2), pages 183-196.
  7. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality In The United States, 1913-1998," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 1-39, February.
  8. Thomas Piketty, 2003. "Income Inequality in France, 1901-1998," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1004-1042, October.
  9. Alvaredo, Facundo, 2010. "A Note on the Relationship between Top Income Shares and the Gini Coefficient," CEPR Discussion Papers 8071, C.E.P.R. Discussion Papers.
  10. Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June.
  11. Stefan Bach & Giacomo Corneo & Viktor Steiner, 2009. "From Bottom To Top: The Entire Income Distribution In Germany, 1992-2003," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(2), pages 303-330, 06.
  12. Fishburn, Peter C. & Willig, Robert D., 1984. "Transfer principles in income redistribution," Journal of Public Economics, Elsevier, vol. 25(3), pages 323-328, December.
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