On the Measurement of Inequality
TL;DR: In this paper, the problem of comparing two frequency distributions f(u) of an attribute y which for convenience I shall refer to as income is defined as a risk in the theory of decision-making under uncertainty.
About: This article is published in Journal of Economic Theory.The article was published on 1970-09-01. It has received 5002 citations till now. The article focuses on the topics: Income inequality metrics & Income distribution.
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TL;DR: In this article, the authors give a complete characterization of the family of Singh-Maddala income distributions in terms of Lorenz-ordering, in the sense that given any two distributions from this family, they show how to determine from the respective parameters whether or not one Lorenzdominates the other.
43 citations
TL;DR: The coefficient of variation (CV) is commonly used to measure relative dispersion as discussed by the authors, but since it is based on the sample mean and standard deviation, outliers can adversely affect it.
Abstract: The coefficient of variation (CV) is commonly used to measure relative dispersion. However, since it is based on the sample mean and standard deviation, outliers can adversely affect it. Additional...
43 citations
TL;DR: This paper showed that people everywhere want broadly the same things in order to be happy: faith in a deity; a decent standard of living; a job; a good family and social life; a neighbourhood in which to live; and above all, good health.
Abstract: This paper complements the burgeoning literature on country-specific studies of happiness by taking a global look at happiness and its determinants. In so doing, it makes two contributions. First, it presents indicators of happiness that are ‘equity adjusted’ and compares their values to those of unadjusted indicators. This comparison shows that countries with the lowest mean happiness scores have their unhappiness compounded when these means are adjusted to take account of the glaring inequality in their inter-personal distribution of happiness. Second, using data on nearly 113 000 respondents, drawn from 80 countries, it shows that people everywhere want broadly the same things in order to be happy: faith in a deity; a decent standard of living; a job; a good family and social life; a good neighbourhood in which to live; and, above all, good health.
42 citations
TL;DR: In this article, the authors investigate how the benefits and burdens of this subsidization scheme are distributed, using micro-data from SOEP for private households during the period of 2010-2017, and they employ three different inequality metrics (Gini coefficient, the Theil index and the Atkinson index).
42 citations
TL;DR: This article examined the causal effect of government spending on the social sectors (health, education and social protection) on three measures of aggregate welfare: the Human Development Index, the Inequality-adjusted Human development Index and child mortality rates, using longitudinal data from 55 low-income and middle-income countries from 1990 to 2009.
Abstract: Over the past two decades, there has been unprecedented attention to the promotion of human development via government spending in the social sectors as a conditio sine qua non for economic growth and improved aggregate welfare. Yet the existing evidence on the subject remains limited and contested. This paper contributes to the literature by examining the causal effect of government spending on the social sectors (health, education and social protection) on three measures of aggregate welfare: the Human Development Index, the Inequality-adjusted Human Development Index and child mortality rates, using longitudinal data from 55 low-income and middle-income countries from 1990 to 2009. We find strong evidence to support the proposition that government social spending has played a significant role in improving aggregate welfare in the developing world. Our results are fairly robust to, inter alia, the method of estimation, the set of control variables and the use of alternative samples and instruments. © 2017 UNU-WIDER. Journal of International Development published by John Wiley & Sons, Ltd.
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TL;DR: In this article, a measure of risk aversion in the small, the risk premium or insurance premium for an arbitrary risk, and a natural concept of decreasing risk aversion are discussed and related to one another.
Abstract: This paper concerns utility functions for money. A measure of risk aversion in the small, the risk premium or insurance premium for an arbitrary risk, and a natural concept of decreasing risk aversion are discussed and related to one another. Risks are also considered as a proportion of total assets.
5,207 citations
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"On the Measurement of Inequality" refers background in this paper
...3 See Rothschild and Stiglitz [13], Hadar and Russell [ 5 ], and Hanoch and Levy [6]....
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1,738 citations
"On the Measurement of Inequality" refers methods in this paper
...Then by applying the results of Pratt [l 11, Arrow [ 2 ], and others, we can see that this requirement (which may be referred to as constant (relative) inequality-aversion) implies that U(y) has the form...
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1,544 citations
TL;DR: In this paper, an analysis of the first step of the decision-making process of an individual decision maker among alternative risky ventures is presented, in terms of a single dimension such as money, both for the utility functions and for the probability distributions.
Abstract: Publisher Summary The choice of an individual decision maker among alternative risky ventures may be regarded as a two-step procedure. The decision maker chooses an efficient set among all available portfolios, independently of his tastes or preferences. Then, the decision maker applies individual preferences to this set to choose the desired portfolio. The subject of this chapter is the analysis of the first step. It deals with optimal selection rules that minimize the efficient set by discarding any portfolio that is inefficient in the sense that it is inferior to a member of the efficient set, from point of view of each and every individual, when all individuals' utility functions are assumed to be of a given general class of admissible functions. The analysis presented in the chapter is carried out in terms of a single dimension such as money, both for the utility functions and for the probability distributions. However, the results may easily be extended, with minor changes in the theorems and the proofs, to the multivariate case. The chapter explains a necessary and sufficient condition for efficiency, when no further restrictions are imposed on the utility functions. It presents proofs of the optimal efficiency criterion in the presence of general risk aversion, that is, for concave utility functions.
1,160 citations