Open AccessThe “Deciles Implied Inequality Indices” for Expressing Income Distribution and Measuring Public Financial Burden of Equalization Policies
Author(s) -
Bijan Bidabad
Publication year - 2019
Publication title -
american economic and social review
Language(s) - English
Resource type - Journals
eISSN - 2576-1277
pISSN - 2576-1269
DOI - 10.46281/aesr.v5i2.347
Subject(s) - decile , economics , index (typography) , inequality , income distribution , economic inequality , redistribution (election) , income inequality metrics , distribution (mathematics) , lorenz curve , econometrics , public economics , gini coefficient , mathematics , statistics , computer science , mathematical analysis , politics , world wide web , political science , law
Different ways have been proposed to measure income inequality; there is no best way to calculate the inequality index that expresses income distribution as it is. Popular inequality indices provide information about some points on the distribution function and analyze the inequality of income without reference to the amount of the budget needed to improve the income distribution. In this paper, we propose a set of “Deciles Implied Inequality Indices”. By using this index, we can show how much transfer payment is needed as a redistribution policy to achieve a desired income distribution consistent with the perceived economic goals of the society. That is, we try to find a fiscal-compensation-based index for reducing inequality. By using “Deciles Implied Inequality Indices”, we may measure how much income (tax and subsidy) may be redistributed to reach the targeted income distribution policy.