Mythical Measures
The Problem of Objective Inequality Measurement in Economics and the Social Sciences
DOI:
https://doi.org/10.36399/GroundingsUG.8.213Keywords:
Gini, Gini Coefficient, Normative, Distributive Justice, Inequality, Subjectivity, Critical AssessmentAbstract
The Gini coefficient, one of the most widely used inequality measures in economics, is thought to report income disparity with a reliable degree of objectivity. However, a critical assessment of the Gini’s implicit normative assumptions reveals that this objectivity is overstated. Moreover, this critique can be extended to other indices as well, uncovering a more general worry that the perception of distributive justice, which determines the ideal level of inequality underlying such indices, is necessarily subjective. As a result, the prospect of a mutually intelligible and transparent discussion on inequality suffers – both at the scientific and policy level. The implication of this finding is that more work needs to be done in specifying the normative foundations of inequality measures.
References
A. B. Atkinson, ‘On the Measurement of Inequality’ in A. B. Atkinson (ed.), Wealth, income and inequality: selected readings (Harmondsworth, 1973).
A. B. Atkinson, ‘On the measurement of inequality’ (1970) 2:3 Journal of economic theory 244-263.
J. A. Charles-Coll, ‘Understanding Income Inequality: Concept, Causes and Measurement’ (2011) 1:3 International Journal of Economics and Management Sciences 17–28.
A. Cobham & A. Sumner, ‘Is It All about the Tails? The Palma Measure of Income Inequality’ (2013) Center for Global Development, Working Paper 343.
F. A. Cowell & E. Flachaire, ‘Income Distribution and Inequality Measurement: The Problem of Extreme Values’ (2007) 141:2 Journal of Econometrics 1044–72.
F. Cowell, Inequality: Measurement 2006.
H. Dalton, ‘The measurement of the inequality of incomes’ (1920) 30:119 The Economic Journal 348-361.
J. Davies & M. Hoy, ‘Making inequality comparisons when Lorenz curves intersect’ (1995) 85:4 The American Economic Review 980-986.
S. Kuznets, ‘Quantitative Aspects of the Economic Growth of Nations: VIII. Distribution of Income by Size’ (1963) 11:2 Economic Development and Cultural Change 1–80.
J. G. Palma, ‘Globalizing Inequality: ”centrifugal” and “centripetal” forces at Work’ (2006) 186 Revue Tiers Monde.
A. Sen, ‘On economic inequality’ (1973) OUP Catalogue.
Downloads
Published
Issue
Section
License
Copyright (c) 2015 Max Schröder
This work is licensed under a Creative Commons Attribution 4.0 International License.
The CC BY 4.0 license is a Creative Commons license. This is a non-copyleft free license that is good for art and entertainment works, and educational works. It is compatible with all versions of the GNU GPL; however, like all CC licenses, it should not be used on software. People are free to: Share — copy and redistribute the material in any medium or format; Adapt — remix, transform, and build upon the material for any purpose, even commercially. The licensor cannot revoke these freedoms as long as you follow the license terms. But they must conform to the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Please check individual article PDF copies to see if any additional restrictions apply.
