Shaikh and Ragab's `Incomes of the Vast Majority': Some additions and extensions

Peter J. Lambert () and Subbu Subramanian ()
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Peter J. Lambert: University of Oregon, USA
Subbu Subramanian: Madras Institute of Development Studies, India

No 354, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: The `Vast majority of incomes ratio (VMIR)' $R_0$ is the ratio of the average income $\mu_0$ of a poorest majority $p_0$ of the population to the overall average income $\mu$. Another measure of equality is $E_0\equiv(1-G)$ where $G$ is the Gini coefficient of inequality of the distribution. Shaikh and Ragab (2007, 2008), employing a wide variety of data sets, have shown (among other things), that when $p_0$ is 70 per cent, $R_0$ serves as a uniformly stable and excellent approximation of $E_0$. We extend the Shaikh-Ragab findings in two directions. We explore some analytics of the relationship between $R_0$ and $E_0$ for a lognormal distribution; and we derive a couple of other VMIRs and related measures of welfare which are distinct from but inspired by the Shaikh-Ragab formulations.

Keywords: Vast Majority of Incomes Ratio; lognormal distribution; Gini coefficient; Lorenz curve; Sen’s welfare index. (search for similar items in EconPapers)
Pages: 11 pages
Date: 2015-01
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Citations: View citations in EconPapers (1)

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