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- Title
THE PRINCIPLE TRANSFERS AND THE VARIANCE OF LOGARITHMS.
- Authors
Creedy, John
- Abstract
This article assesses the concept of income inequality through the variance of logarithms. In recent years there has been considerable discussion of the meaning and measurement of inequality. This has greatly clarified the relationships between alternative criteria according to which distributions are judged to have become more or less equal, and has also made explicit the welfare implications of various statistical measures of inequality. The variance of logarithms has a number of well known properties which are extremely useful for empirical work. In particular the decomposition of the logarithmic variance is much more convenient than the decomposition of other measures, and can be extended to cover dynamic components of changes in income distribution. The usual approach has been to consider very small transfers thereby enabling the inequality measure to be differentiated, though it is intuitively obvious that whether or not the principle is violated will depend on the actual size of the transfer.
- Subjects
INCOME inequality; DISTRIBUTION (Economic theory); ANALYSIS of variance; LOGARITHMS; REAL income; COST analysis
- Publication
Oxford Bulletin of Economics & Statistics, 1977, Vol 39, Issue 2, p153
- ISSN
0305-9049
- Publication type
Article
- DOI
10.1111/j.1468-0084.1977.mp39002005.x