Inferential results for a new measure of inequality

Davydov, Youri; Greselin, Francesca

doi:10.1093/ectj/utz004

Cited by 7 publications

(4 citation statements)

References 24 publications

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“…Davydov and Greselin (2019Greselin ( , 2020 suggested to modify Zenga's idea by comparing the mean income of those below the percentile F −1 (p) with the mean income of those above the percentile F −1 (1 − p). This point of view has led the authors to the index…”

Section: In the Classical Mean-based Worldmentioning

confidence: 99%

Measuring income inequality via percentile relativities

Greselin

Brazauskas

Zitikis

2022

Preprint

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"The rich are getting richer" implies that the population income distributions are getting more right-skewed and heavy-tailed. For such distributions, the mean is not the best measure of the center, but the classical indices of income inequality, including the celebrated Gini index, are all mean-based. In view of this, Professor Gastwirth sounded an alarm back in 2014 by suggesting to incorporate the median into the definition of the Gini index, although noted a few shortcomings of his proposed index. In the present paper we make a further step in the modification of classical indices and, to acknowledge the possibility of differing viewpoints, arrive at three median-based indices of inequality. They avoid the shortcomings of the previous indices and can be used even when populations are ultra-heavy tailed, that is, when their first moments are infinite. The new indices are illustrated both analytically and numerically using parametric families of income distributions, and further illustrated using a real data set of capital incomes of fifteen countries. We also discuss the performance of the indices from the perspective of the Pigou-Dalton principle of transfers.

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Section: In the Classical Mean-based Worldmentioning

confidence: 99%

Measuring income inequality via percentile relativities

Greselin

Brazauskas

Zitikis

2022

Preprint

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“…In assessing territorial inequality, ethical considerations come to the force, and the corresponding methods of analysis can be classified according to two main methods of measuring social justice: statistical ones and those constructing a function of social welfare [11]. The concept of social justice in conjunction with economic efficiency, including that used in the analysis of the functions of social welfare, refers to one of the key problems of the economy of the public sector and is constantly discussed in the scientific and educational literature [12][13][14], frequently in the context of the relationship between inequality and economic growth [15,16]. Statistical methods are used in many studies, including assessing territorial inequality both between different countries and within individual nations (for an overview of these studies, see [17][18][19]).…”

Section: Literature Reviewmentioning

confidence: 99%

Territorial inequality: an agent-based approach in modelling of social policy

Новикова

2021

E3S Web Conf.

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The article proposes a methodological approach for assessing the territorial inequality based on an agent-oriented spatial model. The main decisions are made in the model at the microeconomic level by households and enterprises with spatial coordinates. Then they are aggregated to the level of regions, industries and the economy as a whole. The evaluation of the indicators according to the criterion of social justice is carried out using two groups of methods: firstly, statistical, primarily the Gini coefficients (which are based on the households’ incomes in regions or country as a whole), and secondly, methods for constructing isoelastic social welfare functions at the national and regional or zonal levels, which are based on the households’ utility functions and include the inequality rejection coefficient. Each value of the coefficient corresponds to a certain concept of social justice. This second group of methods is related to the original approach of the author. The model simulates the development of the government social policy, which is carried out by changing taxes and transfers and taking into account the degree of territorial inequality. Model calculations consider pensions and five types of monetary transfers in a fixed structure: unemployment benefits, child benefits, poverty benefits, social aid and basic income benefits. In a series of experiments, the effect on territorial inequality of changes in the total value of social transfers (with their fixed structure) and tax rates in accordance with the proportionality coefficients was assessed. It is used as a toolkit for changing the system of taxes and transfers and for supporting social policy to reduce spatial inequalities in Russia.

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“…Among them are inter-decile ratios like the Palma that contrasts the income of the richest ten percent and the poorest 40 percent (Cobham and Sumner, 2013). Recently, Davydov and Greselin (2019) proposed an inequality measure that is based on an exhaustive comparison of the means for equal population shares situated at opposite ends of the distribution, from the comparison of the highest and lowest quantiles to the comparison of the n − 1 highest quantiles with the n − 1 lowest. If the relative approach is applied to all possible pairs of income instead of grouped incomes, this results in an even more exhaustive comparison of incomes.…”

Section: Introductionmentioning

confidence: 99%

A new inequality measurement tool: The Vinci index

Schlemmer¹

2021

Preprint

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This paper presents a new inequality measurement tool that gives more weight to inequality at the lower end of the income distribution and offers a new way to synthesize the dispersion of the whole distribution. The proposed measure leverages the mean-dependent differentials that sum to the Gini coefficient and scales them by a type of differential that is exclusively concerned with the inequality between two incomes. The resulting index addresses the limitations of the Gini coefficient and possesses a set of desirable properties, including normalization, scale invariance, population invariance, transfer sensitivity, and weak decomposability.

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Inferential results for a new measure of inequality

Cited by 7 publications

References 24 publications

Measuring income inequality via percentile relativities

Measuring income inequality via percentile relativities

Territorial inequality: an agent-based approach in modelling of social policy

A new inequality measurement tool: The Vinci index

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