Linear measures, the gini index, and the income-equality trade-off

Elchanan Ben Porath, Itzhak Gilboa

Research output: Contribution to journalArticlepeer-review

74 Scopus citations

Abstract

This paper provides an axiomatization of linear inequality measures representing binary relations on the subspace of income profiles having identical total income. Interpreting the binary relation as a policymaker’s preference, we extend the axioms to the whole space and find that they characterize linear social evaluation functions. The axiomatization seems to suggest that a policymaker who has a linear measure of inequality on a subspace should have a linear evaluation on the whole space. An extension of the preferences reflected in the Gini index to the whole space is represented by a linear combination of total income and the Gini index. Journal of Economic Literature Classification numbers: D30, D31, D60, D63, D81.

Original languageAmerican English
Pages (from-to)443-467
Number of pages25
JournalJournal of Economic Theory
Volume64
Issue number2
DOIs
StatePublished - 1994
Externally publishedYes

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