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Linear Measures, the Gini Index, and The Income-Equality Trade-off

Abstract : This paper provides an axiomatization of linear inequality measures representing binary relations on the subspace of income profiles having identical total income. Interpreting the binary relation as a policymaker′s preference, we extend the axioms to the whole space and find that they characterize linear social evaluation functions. The axiomatization seems to suggest that a policymaker who has a linear measure of inequality on a subspace should have a linear evaluation on the whole space. An extension of the preferences reflected in the Gini index to the whole space is represented by a linear combination of total income and the Gini index.
keyword : Microeconomic
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Submitted on : Thursday, May 6, 2010 - 2:47:03 PM
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Itzhak Gilboa, Elchanan Ben Porath. Linear Measures, the Gini Index, and The Income-Equality Trade-off. Journal of Economic Theory, Elsevier, 1994, Vol.64, n°2, pp.443-467. ⟨10.1006/jeth.1994.1076⟩. ⟨hal-00481365⟩

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