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Journal ArticleDOI

On the Measurement of Inequality

01 Sep 1970-Journal of Economic Theory (Academic Press)-Vol. 2, Iss: 3, pp 244-263
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 authors found that the more the inequality, the greater the instability in South Vietnam and no relation at all between inequality and rebellion in the South Vietnamese Republic of Vietnam (South Vietnam) in the 1970s.
Abstract: At least since Aristotle, theorists have believed that political dis-content and its consequents—protest, instability, violence, revolution—depend not only on the absolute level of economic well-being, but also on the distribution of wealth. Contemporary political analysts have tried to test this ancient assumption using modern statistical methods. Their results are distressingly confusing. One cross-national investigation finds the commonsensical positive linear relation: the more the inequality, the greater the instability. A second study purports to show the opposite relation in the important case of South Vietnam: the greater the inequality, the less the support for revolution. And a third analysis, also of South Vietnam, detects no relation at all between inequality and rebellion.

121 citations

Posted Content
TL;DR: The authors study trends in the partisanship of Congressional speech from 1873 to 2009 and find that partisanship is far greater today than at any point in the past, suggesting innovation in political persuasion beginning with the Contract with America, possibly reinforced by changes in the media environment.
Abstract: We study trends in the partisanship of Congressional speech from 1873 to 2009. We define partisanship to be the ease with which an observer could infer a congressperson’s party from a fixed amount of speech, and we estimate it using a structural choice model and methods from machine learning. The estimates reveal that partisanship is far greater today than at any point in the past. Partisanship was low and roughly constant from 1873 to the early 1990s, then increased dramatically in subsequent years. Evidence suggests innovation in political persuasion beginning with the Contract with America, possibly reinforced by changes in the media environment, as a likely cause. Naive estimates of partisanship are subject to a severe finite-sample bias and imply substantially different conclusions.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

121 citations

Posted Content
TL;DR: In this article, the authors axiomatically characterize a general measure of achievement, which contains the UNDP human development index as a special case, and provide an empirical illustration of the axiomally characterized indices.
Abstract: The human development index indicates achievement in the living standard of a population in terms of attainment levels of different quality-of-life attributes, such as educational attainment and life expectancy at birth. This paper axiomatically characterizes a general measure of achievement. This achievement index, which contains the UNDP human development index as a special case, can be regarded as a generalized human development index. The general index allows calculation of the percentage contributions of individual attributes to overall achievement and hence to identify the attributes that are more/less susceptible to achievement. This kind of breakdown becomes important from a policy point of view. The paper provides an empirical illustration of the axiomatically characterized indices.

121 citations

Journal ArticleDOI
TL;DR: In this paper, the authors assess the changes in aggregate poverty and inequality that have taken place in Latin America during the past 26 years and put together the largest number of observable observations.

121 citations

References
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Journal ArticleDOI
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

Posted Content

1,748 citations


"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...

    [...]

Journal ArticleDOI
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Abstract: you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with the scholarly community to preserve their work and the materials they rely upon, and to build a common research platform that promotes the discovery and use of these resources. For more information about JSTOR, please contact support@jstor.org.

1,544 citations

Journal ArticleDOI
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