Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314613 
Authors: 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 17716
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Following Sen's (1973) characterization of the Gini coefficient as a ratio between a measure of aggregate income-based stress ("depression" in Sen's terminology) and aggregate income, we transform the Gini coefficient into a social welfare function rather than having the Gini coefficient feature as an input in a social welfare function as in Sen (1973 and 1997), Sen (1976), and Sen (1982). The "Gini social welfare function" assigns weights that reflect preferences to aggregate income and to aggregate income-based stress (income inequality), a desirable property that a social welfare function in which the Gini coefficient features as an input does not have. The transformation bears on the formation of public policy and on the welfare analysis of policy interventions.
Subjects: 
Gini coefficient
aggregate income-based stress
aggregate income
transformation of the Gini coefficient into a social welfare function
JEL: 
C43
D01
D31
D63
H53
I31
I38
P46
Document Type: 
Working Paper

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