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- Title
The Measurement and Trend of Inequality: Comment.
- Authors
Kurien, C. John
- Abstract
This article comments on a study by Morgan Paglin which argues that his measure of interfamily income inequality, which he calls the Paglin-Gini, enables him to capture true variations in income by removing the effects of variations in income due to age. Measures of inequality are of interest primarily as aids to measuring interpersonal differences in welfare. Income in conceived as the best possible proxy for welfare level or utility level. Then, if for each individual there is a time distribution of incomes such that incomes vary over the lifetime of the individual, two individuals who differ with respect to no characteristic but age may have different incomes. This difference in income reflects only difference in the stage of the life cycle in which the two individuals are, and not any true differences in welfare between them. If such fluctuations are identified as life cycle fluctuations in income, eliminating these fluctuations improves income distributions as instruments for interpersonal comparisons of welfare. The elimination of these differences is implicitly associated with the elimination of age-related variation in Paglin's study. appeal of Paglin's study, perhaps, is related to this association. However, in the Paglin-Gini, he not only
- Subjects
INCOME inequality; EQUALITY; GINI coefficient; WEALTH; ECONOMICS
- Publication
American Economic Review, 1977, Vol 67, Issue 3, p517
- ISSN
0002-8282
- Publication type
Article