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- Title
Lorenz non-consistent welfare and inequality measurement.
- Authors
Chateauneuf, Alain; Moyes, Patrick
- Abstract
Typical welfare and inequality measures are required to be Lorenz consistent which guarantees that inequality decreases and welfare increases as a result of a progressive transfer. We explore the implications for welfare and inequality measurement of substituting the weaker absolute differentials and deprivation quasi-orderings for the Lorenz quasi-ordering. Restricting attention to distributions of equal means, we show that the utilitarian model - the so-called expected utility model in the theory of risk - does not permit one to make a distinction between the views embedded in the differentials, deprivation and Lorenz quasi-orderings. In contrast it is possible within the dual model of M. Yaari ( Econometrica 55 (1987), 99–115) to derive the restrictions to be placed on the weighting function which guarantee that the corresponding welfare orderings are consistent with the differentials and deprivation quasi-orderings respectively. Finally we drop the equal mean condition and indicate the implications of our approach for the absolute ethical inequality indices.
- Subjects
PUBLIC welfare; EQUALITY; LORENZ curve; INCOME inequality; SOCIAL status
- Publication
Journal of Economic Inequality, 2004, Vol 2, Issue 2, p61
- ISSN
1569-1721
- Publication type
Article
- DOI
10.1007/s10888-005-4383-2