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The Intensity and Shape of Inequality: The ABG Method of Distributional Analysis
Author(s) -
Chauvel Louis
Publication year - 2016
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/roiw.12161
Subject(s) - inequality , smoothing , curvature , mathematics , microdata (statistics) , econometrics , gini coefficient , entropy (arrow of time) , statistics , statistical physics , economic inequality , mathematical analysis , geometry , physics , population , demography , sociology , census , quantum mechanics
Inequality is anisotropic: its intensity varies by income level. We here develop a new tool, the isograph, to focus on local inequality and illustrate these variations. This method yields three coefficients which summarize the shape of inequality: a main coefficient, α , which measures inequality at the median; and two correction coefficients, β and γ , which pick up any differential curvature at the top and bottom of the distribution. The analysis of a set of 232 microdata samples from 41 different countries in the LIS datacenter archive allows us to provide a systematic overview of the properties of the ABG ( α β γ ) coefficients, which are compared to a set of standard indices including Atkinson indices, generalized entropy, Wolfson polarization, and the GB2 distribution. This method also provides a smoothing tool that reveals the differences in the shape of distributions (the strobiloid) and how these have changed over time.