Economic inequality measurement through Lorenz curves
DOI:
https://doi.org/10.46661/revmetodoscuanteconempresa.2059Keywords:
Curvas de Lorenz, medidas de desigualdad, distribución de la renta, Lorenz curves, income inequality measures, income distributionAbstract
This paper focuses both on the foundations of income inequality measures and on their relations with Lorenz curves, the Pigou-Dalton’s transfer principle and majorization relations among income vectors. So the historic development of these concepts is surveyed to show how the current broadaccepted set of properties and axioms was generated, in order to define whether an inequality measure has a good perform or not. In doing so, it will be possible to check out when a particular inequality measure performs in a suitable way. Furthermore, an analysis on the problems related to inequality orders and dominance relations among income vectors is included. Because of choosing a unique inequality indicator is highly arguable, the construction of a Lorenz-compatible synthetic dynamic inequality indicator is presented, using an initial set with basic Lorenz-compatible inequality indices as starting point. Finally, as an illustration, an analysis of both inequality and well-being trends in the European Union countries during 1993-1999 is included.
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