Income stratification and between-group inequality

The paper demonstrates that the ratio of the Yitzhaki (1994) to the conventional measure of between-group inequality is in general equal to one minus twice the weighted average probability that a random member of a richer (on average) group is poorer than a random member of a poorer (on average) group, and may therefore be interpreted as an index of stratification in its own right

Measuring economic inequality and risk: a unifying approach based on personal gambles, societal preferences and references

The underlying idea behind the construction of indices of economic inequality is based on measuring deviations of various portions of low incomes from certain references or benchmarks, that could be point measures like population mean or median, or curves like the hypotenuse of the right triangle where every Lorenz curve falls into. In this paper we argue that by appropriately choosing population-based references, called societal references, and distributions of personal positions, called gambles, which are random, we can meaningfully unify classical and contemporary indices of economic inequality, as well as various measures of risk. To illustrate the herein proposed approach, we put forward and explore a risk measure that takes into account the relativity of large risks with respect to small ones.Comment: 29 pages, 4 figure

Gini, deprivation and complaints

Recent insights from the philosopher Larry Temkin have suggested a new basis for the measurement of income inequality, founded on the notion of individual “complaints” about income distribution. Under certain specifications of the relationship between complaints and personal incomes it can be shown that a concept similar to the concept of deprivation then emerges. In turn deprivation is related to the Gini index and to poverty. The paper examines the relationships between the Gini index and Lorenz orderings on the one hand and deprivation, poverty and complaints on the other hand

Price Mobility of Locations

This paper applies the concept of mobility to cross-location price dynamics. Exploiting data on prices across Russian regions over 1994-2000, a contribution of relative and absolute mobility of regions to price convergence among them is analyzed.http://deepblue.lib.umich.edu/bitstream/2027.42/57222/1/wp842 .pd

Indices of redistributive effect and reranking: reinterpretation

Kakwani decomposition of redistributive effect into vertical and reranking terms is one of the most widely used tools in measurement of income redistribution. However, Urban (2009) argues that the decomposition features some methodological problems and calls for its reinterpretation. This paper builds several different measurement models, constructs new indices of redistributive effect and reranking reinventing the existing ones, and establishes important propositions on the role of reranking in redistributive process. All that is done to prove that standard interpretation of Kakwani decomposition is misleading. New roles are suggested for the well-known indices of redistributive, vertical and reranking effect.Kakwani decomposition, redistributive, reranking and vertical effects.

How Has the Literature on Gini's Index Evolved in the Past 80 Years?

The Gini coefficient or index is perhaps one of the most used indicators of social and economic conditions. From its first proposal in English in 1921 to the present, a large number of papers on the Gini index has been written and published. Going through these papers represents a demanding task. The aim of this survey paper is to help the reader to navigate through the major developments of the literature and to incorporate recent theoretical research results with a particular focus on different formulations and interpretations of the Gini index, its social welfare implication, and source and subgroup decomposition.Gini coefficent or index; social welfare; decomposition; computation

Relative income and happiness in Asia: Evidence from nationwide surveys in China, Japan, and Korea

This study attempts to examine relative income effects on perceived happiness in three major Asian countries -- China, Japan, and Korea -- in comparison with the United Sates, on the basis of largely comparable nationwide surveys in these countries. Consistent with the results from previous studies in Western countries, comparisons with an individual's own income and average income of the reference group are significantly associated with the individual's perceived happiness in Asia. The associations between relative income and happiness are stronger for individual income than family income in China, while the opposite is true in Japan and Korea. Even after controlling for the subjective assessment of family income or personal class identification within the society as a whole, income comparisons within the reference group matter for assessing happiness, especially when using family income for comparisons. Moreover, relative deprivation within the reference group, which is measured by the Yitzhaki index, is negatively related to happiness, providing more evidence for the validity of the relative income hypothesis.Relative income, Relative deprivation, Asia

Linking Yitzhaki’s and Dagum’s Gini Decompositions

In this article we show that the Gini coefficient is simultaneously decomposable both by sources of income and by populations of income receivers for non-overlapping income distributions: the so-called first-best Gini multi-decomposition. We show that this multidimensional decomposition is useful for many reasons: (i) it is related to the degree of inequality aversion of the decision maker, (ii) it is especially well suited to study inequalities between poor and non-poor people, (iii) it enables one to measure within- and between-group Gini elasticities, which gauge the impact of global transfers on within- and between-group inequalities, respectively.