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Ray-invariant intermediate inequality measures

Working Paper 2011-226

Abstract

This paper introduces a new Lorenz dominance criterion that allows ranking income distributions according to ray-invariant intermediate inequality measures. In doing so, it defines a-Lorenz curves by adapting the generalized Lorenz curves to this case. In addition, it provides an empirical illustration of these tools using Australian income data for the period 2001-2008. The results suggest that despite the reduction of relative inequality, inequality increased for most ray-invariant intermediate value judgments.

Authors: Francisco Azpitarte, Olga Alonso-Villar.

Keywords: Income distribution; Lorenz dominance; Intermediate inequality indices; Ray-invariance.
JEL: D63.