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A comparison of inequality measurement techniques

There are numerous statistical techniques designed for the measurement of inequality. Each individual index has a unique set of properties which can make the choice of an appropriate measure difficult. This paper reviews the desirable properties for inequality indices to exhibit and proposes an additional characteristic that an effective measure may satisfy. Existing inequality measures are assessed against these criteria and a new technique that satisfies all desirable properties is proposed. An empirical demonstration of the proposed measure is provided.

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Paper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 377.

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Date of creation: 2008
Date of revision:
Handle: RePEc:qld:uq2004:377
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  1. Foster, James E., 1983. "An axiomatic characterization of the Theil measure of income inequality," Journal of Economic Theory, Elsevier, vol. 31(1), pages 105-121, October.
  2. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  3. Frank A Cowell, 2006. "Inequality: Measurement," STICERD - Distributional Analysis Research Programme Papers 86, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  4. Cowell, Frank A. & Kuga, Kiyoshi, 1981. "Additivity and the entropy concept: An axiomatic approach to inequality measurement," Journal of Economic Theory, Elsevier, vol. 25(1), pages 131-143, August.
  5. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June.
  6. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  7. Kolm, Serge-Christophe, 1976. "Unequal inequalities. II," Journal of Economic Theory, Elsevier, vol. 13(1), pages 82-111, August.
  8. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-20, July.
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