[EQ] Income inequality measures

Income inequality measures

Fernando G De Maio, Department of Sociology and Anthropology, Simon Fraser University, British Columbia, Canada
Journal of Epidemiology and Community Health; October 2007 (Volume 61, Number 10)

Website: http://jech.bmj.com/cgi/content/full/61/10/849

"....The Gini coefficient has been the most popular method for operationalising income inequality in the public health literature. However, a number of alternative methods exist, and they offer researchers the means to develop a more nuanced understanding of the distribution of income. Income inequality measures such as the generalised entropy index and the Atkinson index offer the ability to examine the effects of inequalities in different areas of the income spectrum, enabling more meaningful quantitative assessments of qualitatively different inequalities. This glossary provides a conceptual introduction to these and other income inequality measures...."

Gini coefficient, By far the most popular measure of income inequality, the Gini coefficient^15–18 is derived from the Lorenz curve framework ^. The Lorenz curve shows the percentage of total income earned by cumulative percentage of the population.

Atkinson index More precisely labelled a family of income inequality measures

Coefficient of variation (CV) This measure of income inequality is calculated by the dividing the standard deviation of the income distribution by its mean.

Decile ratios A simple but effective way to examine income inequality is to calculate decile ratios.

Generalised entropy (GE) index

Kakwani progressivity index, builds from the Gini framework.

Proportion of total income earned. The proportion of income received by the poorest nth% of the population is one of the most intuitive measures of income inequality.

Robin Hood index, also known as the Pietra ratio

Sen poverty measure, incorporates the Gini coefficient for people living below the poverty line along with the headcount ratio of poverty and the average income of those below the poverty line...."

 

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