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‘Williamson’s Fallacy’ in Estimation of Inter-Regional Inequality

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  • Gluschenko, Konstantin

Abstract

While estimating regional inequality, many economists use inequality indices weighted by regions’ shares in the national population. Despite this approach is widespread, its adequacy has not received attention in the regional science literature. This paper proves that such approach is conceptually inconsistent, yielding an estimate of interpersonal inequality among the whole population of the country rather than an estimate of regional inequality. Moreover, the population-weighted inequality indices do not meet requirements to an adequate inequality measure.

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  • Gluschenko, Konstantin, 2015. "‘Williamson’s Fallacy’ in Estimation of Inter-Regional Inequality," MPRA Paper 71075, University Library of Munich, Germany, revised 03 May 2016.
    • Handle: RePEc:pra:mprapa:71075
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    More about this item

    Keywords

    Inequality index; Weighting by population; Williamson coefficient of variation; inequality axioms;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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