Okamoto, Masato
(2012):
*The Relationship between the Equivalence Scale and the Inequality Index and Its Impact on the Measurement of Income Inequality.*

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## Abstract

The paper discusses the ∪-shaped relationship between the equivalence scale n^ε and the Gini index instead of considering the equivalence scale’s relationship to the generalised entropy measures, which was studied by Coulter, et al. (1992). An end-point condition is given for the ∪-shaped relationship, which corresponds to a condition for that of the generalised entropy measures. Additionally, using a mixture of log-normal distributions approach, five factors are shown to be required for a convex relationship between size elasticity and the Gini index. Empirically, income distributions satisfy those factors. Thus, the end-point condition essentially determines the shape of the relationship.

Item Type: | MPRA Paper |
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Original Title: | The Relationship between the Equivalence Scale and the Inequality Index and Its Impact on the Measurement of Income Inequality |

Language: | English |

Keywords: | inequality; income distribution; equivalence scale |

Subjects: | D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions |

Item ID: | 37410 |

Depositing User: | Masato Okamoto |

Date Deposited: | 17 Mar 2012 12:37 |

Last Modified: | 03 Oct 2019 18:19 |

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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/37410 |