The evaluation of income distributions is usually based on the Pigou-Dalton (PD) principle which says that a transfer from any people to people who have less decreases economic inequality, i.e., increases the social evaluation index. We introduce two weaker principles of transfers which refer to a parameter θ. With the new principles, only those PD transfers increase the social evaluation index which take from the class of incomes above θ and give to the class below θ. The relative positions of individuals remain unchanged, and either no individual may cross the line θ (principle of transfers about θ) or some may do who have been situated next to it (starshaped principle of transfers at θ). θ may be a given constant, a function of mean income, or a quantite of the income distribution. The classes of indices which are consistent with these transfers are completely characterized, and examples are given.
Inequality indices and the starshaped principle of transfers
MULIERE, PIETRO
1996
Abstract
The evaluation of income distributions is usually based on the Pigou-Dalton (PD) principle which says that a transfer from any people to people who have less decreases economic inequality, i.e., increases the social evaluation index. We introduce two weaker principles of transfers which refer to a parameter θ. With the new principles, only those PD transfers increase the social evaluation index which take from the class of incomes above θ and give to the class below θ. The relative positions of individuals remain unchanged, and either no individual may cross the line θ (principle of transfers about θ) or some may do who have been situated next to it (starshaped principle of transfers at θ). θ may be a given constant, a function of mean income, or a quantite of the income distribution. The classes of indices which are consistent with these transfers are completely characterized, and examples are given.
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