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Inequality with Ordinal Data
Author(s) -
Cowell Frank A.,
Flachaire Emmanuel
Publication year - 2017
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/ecca.12232
Subject(s) - inequality , ordinal data , categorical variable , ordinal regression , interpretation (philosophy) , mathematics , happiness , mathematical economics , econometrics , log sum inequality , statistics , computer science , psychology , social psychology , mathematical analysis , programming language
The standard theory of inequality measurement assumes that the equalisand is a cardinal quantity, with known cardinalization. However, one often needs to make inequality comparisons where either the cardinalization is unknown or the underlying data are categorical. We propose an alternative approach to inequality analysis that is rigorous, has a natural interpretation, and embeds both the ordinal data problem and the well‐known cardinal data problem. We show how the approach can be applied to the inequality of happiness and of health status.