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INEQUALITY MEASUREMENT USING ‘NORM INCOMES’: WERE GARVY AND PAGLIN ONTO SOMETHING AFTER ALL?
Author(s) -
Jenkins Stephen P.,
O'Higgins Michael
Publication year - 1989
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1989.tb00593.x
Subject(s) - inequality , norm (philosophy) , economics , econometrics , income distribution , multivariate statistics , mathematics , income inequality metrics , economic inequality , mathematical economics , welfare economics , statistics , mathematical analysis , political science , law
The “norm income” approach to inequality measurement is based on a comparison of the observed income distribution with a reference distribution consistent with the socially desired minimum degree of inequality (and not the equal shares distribution). Garvy and Paglin suggested such an approach, and we show that their methods, suitably modified, are closely related to the multivariate methods recently proposed by Atkinson and Bourguignon. The advantage and disadvantages of a norm income approach are analyzed in detail.