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Title
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What do normative indices of multidimensional inequality really measure?
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Author
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Abstract
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| We argue that normative indices of multidimensional inequality do not only measure a distribution's extent of inequity (i.e., the gaps between the better-off and the worse-off), but also its extent of inefficiency (i.e., the non-realized mutually beneficial exchanges of goods). We provide a decomposition that allows us to quantify these two parts of inequality. Strikingly, the inequity component turns out to be a two-stage measure, that is, a measure that applies a unidimensional inequality measure to the vector of individual well-being levels. The decomposition also clarifies existing controversies surrounding two prominent transfer axioms, viz., uniform majorization and correlation increasing majorization. An application to inequality in human development illustrates the analysis. |
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Language
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English
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Source (journal)
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Journal of public economics. - Amsterdam
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Publication
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Amsterdam
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2015
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ISSN
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0047-2727
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DOI
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10.1016/J.JPUBECO.2015.03.003
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Volume/pages
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130
(2015)
, p. 94-104
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ISI
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000365061300008
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Full text (Publisher's DOI)
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Full text (open access)
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Full text (publisher's version - intranet only)
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