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Using the zeta function to explain 'downside' and 'upside' inequality aversion

Author

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  • S Subramanian

    (Independent Scholar (formerly, Madras Institute of Development Studies))

Abstract

This paper presents a single-parameter generalization of the Gini coefficient of inequality. The generalization yields a unique sequence of measures parametrized by the integer k which runs from minus infinity to plus infinity, and is based on the zeta function (defined on the set of integers). Using suitably normalized income weights, one can generate a family of welfare functions and associated inequality measures. For k belonging to {…,-3,-2,-1}, one has a family of decreasingly ‘upside inequality aversion' measures; when k is zero, one has the familiar ‘transfer-neutral' Gini coefficient; and for k belonging to {1,2,3,…}, one has a family of increasingly ‘downside inequality aversion' measures. As k tends to minus infinity, the underlying social welfare function mimics a utilitarian rule, and as k tends to plus infinity, the Rawlsian rule. When k is 1, the corresponding inequality measure turns out to be the Bonferroni coefficient.

Suggested Citation

  • S Subramanian, 2023. "Using the zeta function to explain 'downside' and 'upside' inequality aversion," Economics Bulletin, AccessEcon, vol. 43(1), pages 8-17.
  • Handle: RePEc:ebl:ecbull:eb-22-00706
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    References listed on IDEAS

    as
    1. Claudio Zoli, 1999. "Intersecting generalized Lorenz curves and the Gini index," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(2), pages 183-196.
    2. S Subramanian, 2021. "A single-parameter generalization of Gini based on the 'metallic' sequences of number theory," Economics Bulletin, AccessEcon, vol. 41(4), pages 2309-2319.
    3. Satya Chakravarty, 2007. "A deprivation-based axiomatic characterization of the absolute Bonferroni index of inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(3), pages 339-351, December.
    4. Masato Okamoto, 2022. "Level-adjusted S-Gini index and its complementary index as a pair of sensitivity-adjustable inequality measures," Economics Bulletin, AccessEcon, vol. 42(1), pages 1-16.
    5. Rolf Aaberge & Tarjei Havnes & Magne Mogstad, 2021. "Ranking intersecting distribution functions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(6), pages 639-662, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    transfer-sensitivity; transfer-neutrality; reverse transfer-sensitivity; zeta function; Bentham; Rawls; Gini; Bonferroni;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D6 - Microeconomics - - Welfare Economics

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