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: The FGT class of decomposable poverty measures was introduced in Foster, Greer, and Thorbecke (Econometrica 52:761-776, 1984) as discussed by the authors.
Abstract: Twenty-five years ago, the FGT class of decomposable poverty measures was introduced in Foster, Greer, and Thorbecke (Econometrica 52:761–776, 1984). The present study provides a retrospective view of the FGT paper and the subsequent literature, as well as a brief discussion of future directions. We identify three categories of contributions: to measurement, to axiomatics, and to application. A representative subset of the literature generated by the FGT methodology is discussed and grouped according to this taxonomy. We show how the FGT paper has played a central role in several thriving literatures and has contributed to the design, implementation, and evaluation of prominent development programs; the breadth of its impact is evidenced by the many topics beyond poverty to which its methodology has been applied. We conclude with a selection of prospective research topics.
187 citations
Cites background or methods from "On the Measurement of Inequality"
...More recently, and in a different context, the property has been shown to select Atkinson’s [7] parametric class of equally distributed equivalent income (ede) functions and the other “general means” from among all possible income standards....
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...23Atkinson [8] uses an additive form to mirror the structure of the welfare functions in Atkinson [7] and does not mention decomposability....
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...2See Atkinson [7]; Kolm [88–90]; and Sen [118], the surveys of Foster and Sen [61] and Cowell [36], and the retrospective of Kanbur [85]....
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...Foster and Shorrocks focus on the three main FGT measures and find that the associated orderings are, in fact, the three orders of stochastic dominance developed in risk analysis, with P0 yielding first order dominance, P1 yielding second order dominance (used by Atkinson [7]), and P2 yielding third order dominance....
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...8The interpretation of the parameter clearly drew its inspiration from the Atkinson [7] class of inequality measures and its “inequality aversion” parameter....
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187 citations
TL;DR: This article used the tools of social-choice theory to provide an axiomatic formulation of the problem of social evaluations of alternatives involving different numbers of people, which yields a class of social criteria called critical-level generalized utilitarianism.
186 citations
TL;DR: In this paper, conceptual and empirical problems with the United Nations Development Programme's two gender-related indicators: the Gender-related Development Index and the Gender Empowerment Measure are discussed.
Abstract: This paper critically reviews conceptual and empirical problems issues with the United Nations Development Programme's two gender‐related indicators: the Gender‐related Development Index and the Gender Empowerment Measure While supporting the need for gender‐related development measures, the paper argues that there are serious conceptual and empirical problems with both measures that limit the usefulness of these composite indicators Where appropriate and feasible, the paper suggests modifications to the measures that address some of the identified problems
183 citations
TL;DR: Encaoua and Jacquemin this article studied the degree of monopoly, Indices of Concentration and Threat of Entry in the United States and found that the degree is correlated with the threat of entry.
Abstract: Degree of Monopoly, Indices of Concentration and Threat of Entry Author(s): David Encaoua and Alexis Jacquemin Source: International Economic Review, Vol. 21, No. 1 (Feb., 1980), pp. 87-105 Published by: Wiley for the Economics Department of the University of Pennsylvania and Institute of Social and Economic Research -Osaka University Stable URL: http://www.jstor.org/stable/2526242 . Accessed: 09/11/2014 05:57
182 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