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Positive Inequality Indices

In: Lectures on Inequality, Poverty and Welfare

Author

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  • Antonio Villar

    (Universidad Pablo de Olavide)

Abstract

This chapter discusses positive inequality measures, as functions that try to provide descriptive estimates of the variability of income distributions that satisfy most of the properties presented in Chap. 2 and are compatible with our intuitions about what inequality means. There are no explicit references to social welfare even though different measures incorporate implicitly different value judgements. Indeed, one can think of those measures as particular ways of aggregating the differences between individual incomes and a reference value, most of the times the mean income. We review here four different ways of comparing income distributions from a descriptive point of view: the Lorenz curve, the Gini index, the Theil’s family of indices and the Palma ratio. We shall check the properties that those measures satisfy in order to illustrate the different ways of valuing inequality. There are many other ways of measuring inequality, but these are the most common ones.

Suggested Citation

  • Antonio Villar, 2017. "Positive Inequality Indices," Lecture Notes in Economics and Mathematical Systems, in: Lectures on Inequality, Poverty and Welfare, chapter 0, pages 31-56, Springer.
    • Handle: RePEc:spr:lnechp:978-3-319-45562-4_3
    DOI: 10.1007/978-3-319-45562-4_3
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