Greselin, Francesca and Zitikis, Ricardas (2015): Measuring economic inequality and risk: a unifying approach based on personal gambles, societal preferences and references.

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Abstract
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 populationbased 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.
Item Type:  MPRA Paper 

Original Title:  Measuring economic inequality and risk: a unifying approach based on personal gambles, societal preferences and references 
English Title:  Measuring economic inequality and risk: a unifying approach based on personal gambles, societal preferences and references 
Language:  English 
Keywords:  economic inequality, reference measure, personal gamble, inequality index, risk measure, relativity. 
Subjects:  C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C13  Estimation: General C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C18  Methodological Issues: General C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory I  Health, Education, and Welfare > I3  Welfare, WellBeing, and Poverty > I32  Measurement and Analysis of Poverty 
Item ID:  65892 
Depositing User:  Francesca Greselin 
Date Deposited:  03. Aug 2015 14:50 
Last Modified:  03. Aug 2015 15:34 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/65892 