Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/44952
Authors: 
Subramanian, Subbu
Year of Publication: 
2011
Series/Report no.: 
Economics Discussion Papers 2011-7
Abstract: 
Subgroup decomposability is a very useful property in an inequality measure, and level-sensitivity, which requires a given level of inequality to acquire a greater significance the poorer a population is, is a distributionally appealing axiom for an inequality index to satisfy. In this paper, which is largely in the nature of a recollection of important results on the characterization of subgroup decomposable inequality measures, the mutual compatibility of subgroup decomposability and level-sensitivity is examined, with specific reference to a classification of inequality measures into relative, absolute, centrist, and unit-consistent types. Arguably, the most appealing combination of properties for a symmetric, continuous, normalized, transfer-preferring and replication-invariant (S-C-N-T-R) inequality measure to satisfy is that of subgroup decomposability, centrism, unit-consistency and level-sensitivity. The existence of such an inequality index is (as far as this author is aware) yet to be established. However, it can be shown, as is done in this paper, that there does exist an S-C-N-T-R measure satisfying the (plausibly) next-best combination of properties - those of decomposability, centrism, unit-consistency and level-neutrality.
Subjects: 
subgroup decomposability
level-sensitivity
absolute inequality measure
relative inequality measure
centrist inequality measure
unit-consistency
JEL: 
D30
D31
D63
Creative Commons License: 
http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type: 
Working Paper

Files in This Item:
File
Size
175.18 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.