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Restricted Inequality and Relative Poverty

  • Paul Makdissi


    (Département d'économique, Université de Sherbrooke)

  • Jean-Yves Duclos


    (Pavillon De sève, Université Laval, Sainte-Foy, Québec, Canada)

This paper develops criteria for a new concept of restricted inequality dominance and show how they relate to criteria for comparing relative poverty. The results warn against the use of some popular indices of inequality.\ They do, however, suggest an interesting extension of the Schutz coefficient as well as a use of Lorenz curves for the analysis of relative poverty and restricted inequality. We also illustrate graphically how the new criteria of restricted inequality dominance extend the ranking power of previously proposed inequality dominance criteria.

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Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 01-06.

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Length: 33 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:shr:wpaper:01-06
Contact details of provider: Postal: Sherbrooke, Québec, J1K 2R1
Phone: (819) 821-7233
Fax: (819) 821-6930
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  1. Ravallion, Martin, 1994. "Measuring Social Welfare with and without Poverty Lines," American Economic Review, American Economic Association, vol. 84(2), pages 359-64, May.
  2. Rolf Aaberge, 2009. "Ranking intersecting Lorenz curves," Social Choice and Welfare, Springer, vol. 33(2), pages 235-259, August.
  3. Hoy, M. & Davies, J., 1991. "The Normative Significance of Using Third-Degree Stochastic Dominance in Comparing Income Distributions," Working Papers 1991-8, University of Guelph, Department of Economics and Finance.
  4. Russell Davidson & Jean-Yves Duclos, 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Econometrica, Econometric Society, vol. 68(6), pages 1435-1464, November.
  5. Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April.
  6. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  7. Jean-Yves Duclos & Paul Makdissi, 2004. "Restricted and Unrestricted Dominance for Welfare, Inequality, and Poverty Orderings," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(1), pages 145-164, 02.
  8. Blackorby, Charles & Donaldson, David, 1978. "Measures of relative equality and their meaning in terms of social welfare," Journal of Economic Theory, Elsevier, vol. 18(1), pages 59-80, June.
  9. Foster, James E. & Shorrocks, Anthony F., 1988. "Inequality and poverty orderings," European Economic Review, Elsevier, vol. 32(2-3), pages 654-661, March.
  10. Buhong Zheng, 2001. "Poverty orderings: A graphical illustration," Social Choice and Welfare, Springer, vol. 18(1), pages 165-178.
  11. Sutherland, Holly & Immervoll, Herwig & O'Donoghue, Cathal, 1999. "An introduction to EUROMOD," EUROMOD Working Papers EM0/99, EUROMOD at the Institute for Social and Economic Research.
  12. Claudio Zoli, 1999. "Intersecting generalized Lorenz curves and the Gini index," Social Choice and Welfare, Springer, vol. 16(2), pages 183-196.
  13. Zheng, Buhong, et al, 2000. "Inequality Orderings, Normalized Stochastic Dominance, and Statistical Inference," Journal of Business & Economic Statistics, American Statistical Association, vol. 18(4), pages 479-88, October.
  14. Shorrocks, Anthony F & Foster, James E, 1987. "Transfer Sensitive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 485-97, July.
  15. Blakorby, Charles & Donaldson, David, 1980. "Ethical Indices for the Measurement of Poverty," Econometrica, Econometric Society, vol. 48(4), pages 1053-60, May.
  16. Chakravarty, Satya R., 1983. "A new index of poverty," Mathematical Social Sciences, Elsevier, vol. 6(3), pages 307-313, December.
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