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Intermediate inequality and welfare.

By Coral del Río and Javier Ruiz-Castillo


We introduce a new centrist or intermediate inequality concept, between the usual relative and absolute notions, which is shown to be a variant of the α-ray invariant inequality measures in Pfingsten and Seidl (1997). We say that distributions x and y have the same (x, π)-inequality if the total income difference between them is allocated among the individuals as follows: 100π% preserving income shares in x, and 100(1−π)% in equal absolute amounts. This notion can be made as operational as current standard methods in Shorrocks (1983).

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