Lorenz Curves and Generalised Entropy Inequality Measures

Nicholas Rohde

Chapter 15 in Modeling Income Distributions and Lorenz Curves, 2008, pp 271-283 from Springer

Abstract: Abstract Lorenz curves and Generalised Entropy (GE) measures are popular tools for analyzing income inequality. This paper seeks to connect these techniques by demonstrating that GE inequality measures may be derived directly from the Lorenz curve. The paper provides analytical expressions for Theil’s T and L inequality measures, half the square of the coefficient of variation and Atkinson’s utility based measure in terms of the Lorenz curve. Mathematical expressions for common GE measures are derived for three simple parametric specifications. The results are empirically illustrated and shown to be consistent with Lorenz dominance.

Keywords: Income Inequality; Generalise Entropy; Lorenz Curve; Inequality Measure; Income Share (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:spr:esichp:978-0-387-72796-7_15

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DOI: 10.1007/978-0-387-72796-7_15

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