Comparisons of utility inequality and income inequality

Timothy Mathews and Jesse A. Schwartz

Economics Letters, 2019, vol. 178, issue C, 18-20

Abstract: A simple theoretical model is developed and analyzed to investigate the possible relationships between income inequality and utility inequality. Measuring utility inequality and income inequality with Gini coefficients, it is argued that there need not be any relation whatsoever between the realized levels of inequality in these two distinct outcomes. That is, a high level of income inequality could result when there is either equally high or absolutely no utility inequality, and a low level of income inequality could result when there is either no utility inequality or a relatively high degree of utility inequality. Consequently, if what we are actually concerned with is inequality in utility or well-being, observations on income inequality might be meaningless.

Keywords: Income inequality; Utility inequality (search for similar items in EconPapers)
JEL-codes: D31 D63 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:178:y:2019:i:c:p:18-20

DOI: 10.1016/j.econlet.2019.02.015

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