Inequality Indices

Antonio Villar

Chapter Chapter 2 in Lectures on Inequality, Poverty and Welfare, 2017, pp 19-30 from Springer

Abstract: Abstract This chapter presents the notion of inequality indices as functions that map the space of income distributions into the real numbers. We address here two specific questions. First, we discuss a set of properties, or requirements, that make a function a suitable candidate for an inequality index. Those properties include Normalisation, Symmetry, Population Replication, Principle of Transfers, Continuity, Scale Independence and Additive Decomposability. Second, we illustrate the difference between the notions of dispersion and inequality, by analysing the properties and key features of the variance and its related measures (standard deviation, coefficient of variation). We show that even though the variance satisfies most of the properties we may require for an inequality index, it is not a suitable inequality measure.

Keywords: Income Distribution; Inequality Measure; Income Difference; Inequality Index; Population Share (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-319-45562-4_2

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DOI: 10.1007/978-3-319-45562-4_2

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