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 propose relative and absolute measures of deprivation using social satisfaction functions, and demonstrate the existence of a relationship between summary indices of deprivation (including the Gini coefficient, the maximin index, the coefficient of variation and their absolute counterparts) and social satisfaction.
Abstract: This paper proposes relative and absolute measures of deprivation using social satisfaction functions. The relative (absolute) measure gives us the amount by which social satisfaction can be increased in proportional (absolute) terms by redistributing incomes equally. We also demonstrate the existence of a relationship between summary indices of deprivation (including the Gini coefficient, the maximin index, the coefficient of variation and their absolute counterparts) and social satisfaction.
40 citations
TL;DR: It is shown that single ENC cells labelled to follow clonality in the intestine reveal extraordinary and unpredictable variation in number and position of descendant cells, even though ENS development is highly predictable at the population level.
Abstract: Cell lineage tracing is a powerful tool for understanding how proliferation and differentiation of individual cells contribute to population behaviour. In the developing enteric nervous system (ENS), enteric neural crest (ENC) cells move and undergo massive population expansion by cell division within self-growing mesenchymal tissue. We show that single ENC cells labelled to follow clonality in the intestine reveal extraordinary and unpredictable variation in number and position of descendant cells, even though ENS development is highly predictable at the population level. We use an agent-based model to simulate ENC colonization and obtain agent lineage tracing data, which we analyse using econometric data analysis tools. In all realizations, a small proportion of identical initial agents accounts for a substantial proportion of the total final agent population. We term these individuals superstars. Their existence is consistent across individual realizations and is robust to changes in model parameters. This inequality of outcome is amplified at elevated proliferation rate. The experiments and model suggest that stochastic competition for resources is an important concept when understanding biological processes which feature high levels of cell proliferation. The results have implications for cell-fate processes in the ENS.
40 citations
TL;DR: In this article, the authors investigated the relationship between the effect of problem gambling and excessive and disproportionate spending by gamblers in three different jurisdictions: France, Quebec, and Germany, and found strong positive relationships between the GINI coefficient and the share of revenue derived from problem gamblers, and excess spending of gamblers.
40 citations
TL;DR: In this paper, the authors show that the way individual income data should be aggregated into an index of inequality in order to explain countries' growth performance is theory specific, and that the use of a wrong measure might obscure the inequality-growth relationship and that relative performance of different measures of inequality can be informative about the channel through which inequality influences economic growth.
Abstract: We show that the way individual income data should be aggregated into an index of inequality in order to explain countries' growth performance is theory specific. A simulation set-up shows that the use of a wrong measure might obscure the inequality-growth relationship and that the relative performance of different measures of inequality can be informative about the channel through which inequality influences economic growth.
40 citations
Cites background or methods from "On the Measurement of Inequality"
...7 We derived the income distribution in percentiles from the data provided by Gottschalk and Smeeding (2000) and Atkinson (2003)....
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...Moreover they can order income vectors differently (Atkinson (1970), Cowell (2000))....
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TL;DR: The results suggest that the organizational structure of large projects is constrained to evolve towards a state that balances the costs and benefits of developer coordination, and the mechanisms used to achieve this state depend on the project’s scale.
Abstract: Software evolution is a fundamental process that transcends the realm of technical artifacts and permeates the entire organizational structure of a software project. By means of a longitudinal empirical study of 18 large open-source projects, we examine and discuss the evolutionary principles that govern the coordination of developers. By applying a network-analytic approach, we found that the implicit and self-organizing structure of developer coordination is ubiquitously described by non-random organizational principles that defy conventional software-engineering wisdom. In particular, we found that: (a) developers form scale-free networks, in which the majority of coordination requirements arise among an extremely small number of developers, (b) developers tend to accumulate coordination requirements with more and more developers over time, presumably limited by an upper bound, and (c) initially developers are hierarchically arranged, but over time, form a hybrid structure, in which core developers are hierarchically arranged and peripheral developers are not. Our results suggest that the organizational structure of large projects is constrained to evolve towards a state that balances the costs and benefits of developer coordination, and the mechanisms used to achieve this state depend on the project's scale.
40 citations
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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