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: A new household time allocation model based on the iso-elastic class of social welfare function, which can include different types of household utility functions as special cases (e.g., Nash, utilitarianism, autocratic and max-min types) is developed.
Abstract: Travel behavior models assuming individual decision-making processes have been a dominant theme in transportation studies. While the assumption that an individual can decide on all relevant aspects of some types of travel behavior may be reasonable, in many other aspects household members interact before making decisions about different activities that they perform and the time that is involved. On the other hand, different types of households may show different group decision-making mechanisms. In other words, there might exist diverse intra-household interactions during joint decision-making processes. To reflect this point, this paper aims to develop a new household time allocation model based on the iso-elastic class of social welfare function, which can include different types of household utility functions as special cases (e.g., Nash, utilitarianism, autocratic and max-min types). Throughout this empirical analysis, which uses an activity diary data collected in a depopulated region of Japan, the effectiveness of the proposed model is confirmed. Furthermore, the model's applicability in evaluating transportation policies for elderly people is examined based on a simulation analysis.
101 citations
TL;DR: A history of economic thought on poverty since the mercantilists, concentrating on relevance to current economic analysis and policy, is discussed in this article, where the authors examine the interactions between demographic, nutritional, and labor-force characteristics of poverty groups.
Abstract: Publisher Summary The structure, efficiency, and growth of production affect (and are affected by) the distribution of consumption. Poverty analysis has three tasks: (1) to define and describe “poverty,” (2) to understand its causes, and (3) to inform policy. This chapter outlines history of economic thought on poverty since the mercantilists, concentrating on relevance to current economic analysis and policy. It examines how poverty is defined and measured. Evidence from modern household surveys has allowed in the examination of the interactions between demographic, nutritional, and labor-force characteristics of poverty groups. In this process, modern economics is developing some of the central insights of the classical economists, though with measurement and modeling methods not available to them. The chapter discusses the classic development issue of the effect of growth on poverty and inequality, and (the recent classic) macroeconomic adjustment and the poor. It explores several issues that arise in governmental attempts to reduce poverty through direct interventions.
101 citations
TL;DR: In this article, the authors show that using P90/P10 does not completely obviate time-inconsistency problems, especially for household income inequality trends, when used with public use data.
Abstract: The March Current Population Survey (CPS) is the primary data source for estimation of levels and trends in labor earnings and income inequality in the USA. Time-inconsistency problems related to top coding in theses data have led many researchers to use the ratio of the 90th and 10th percentiles of these distributions (P90/P10) rather than a more traditional summary measure of inequality. With access to public use and restricted-access internal CPS data, and bounding methods, we show that using P90/P10 does not completely obviate time-inconsistency problems, especially for household income inequality trends. Using internal data, we create consistent cell mean values for all top-coded public use values that, when used with public use data, closely track inequality trends in labor earnings and household income using internal data. But estimates of longer-term inequality trends with these corrected data based on P90/P10 differ from those based on the Gini coefficient. The choice of inequality measure matters.
101 citations
03 Jun 2019
TL;DR: Insights gleaned from smartphone apps and wearable devices are reviewed and best practices for addressing the limitations of large-scale data from apps and wearables are proposed.
Abstract: Smartphone apps and wearable devices for tracking physical activity and other health behaviors have become popular in recent years and provide a largely untapped source of data about health behaviors in the free-living environment. The data are large in scale, collected at low cost in the “wild”, and often recorded in an automatic fashion, providing a powerful complement to traditional surveillance studies and controlled trials. These data are helping to reveal, for example, new insights about environmental and social influences on physical activity. The observational nature of the datasets and collection via commercial devices and apps pose challenges, however, including the potential for measurement, population, and/or selection bias, as well as missing data. In this article, we review insights gleaned from these datasets and propose best practices for addressing the limitations of large-scale data from apps and wearables. Our goal is to enable researchers to effectively harness the data from smartphone apps and wearable devices to better understand what drives physical activity and other health behaviors.
101 citations
TL;DR: This article developed a model of price dispersion to distinguish the impact of price discrimination from that of peak load pricing schemes or atypical competition resulting from the financial difficulties of the early 1990s.
Abstract: We develop a model of price dispersion to distinguish the impact of price discrimination from that of peak load pricing schemes or atypical competition resulting from the financial difficulties of the early 1990s By utilizing three alternative measures of dispersion and appealing to economic theory for our specification, we find robust results suggesting an estrangement between price dis- persion and price discrimination While some discrimination continues to persist at monopolized endpoints, most dispersion is associated with fare wars and peak load pricing schemes
100 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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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...
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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