ANALYSIS OF INDICES OF ECONOMIC INEQUALITY FROM A MATHEMATICAL POINT OF VIEW

Ricardas Zitikis (zitikis@stats.uwo.ca)
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Ricardas Zitikis: Department of Statistical and Actuarial Sciences, The University of Western Ontario, AND Laboratory for Research in Statistics and Probability, Carleton University,

No lrsp-TRS366, RePAd Working Paper Series from Département des sciences administratives, UQO

Abstract: A number of indices of economic inequality have been proposed in the literature. Their constructions are based on various econometric motives and justifications such as axioms of fairness. In this paper we analize the indices stepping slightly aside from their econometric meanings and adopting a mathematical approach that treats the indices as distances – in some functional spaces – between the egalitarian and actual Lorenz curves. More specifically, starting with, and being guided by, the econometric definitions of various indices, we modify the indices in such a way that the resulting ones become natural from the mathematical point of view. It turns out that some of the new “mathematical” indices coincide with the corresponding well known “econometric” ones, some appear to be only asymptotically equivalent, and some turn out to have different asymptotic behaviour when the sample size indefinitely increases.

Keywords: Dominance; Lagrangian Multiplier; Likelihood Ratio Test; MSE; Non-central Chisquare and F; Ridge Regression; Superiority; Wald Test. (search for similar items in EconPapers)
JEL-codes: C10 C40 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2002-07-25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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