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The Economic Theory of Income Inequality

Edited by Robert A. Becker, Professor of Economics, Indiana University, Bloomington, US
Professor Becker has selected seminal papers covering topics including foundations of income inequality measurement, the social welfare view of inequality and directions for future research on economic inequality.
Extent: 704 pp
Hardback Price: $383.00 Web: $344.70
Publication Date: 2013
ISBN: 978 0 85793 908 1
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The very meaning of economic inequality is fundamental for understanding today’s policy debates over issues such as interpreting changes in income inequality over time, across countries, or between groups within a society, as well as determining whether or not society is becoming more polarized with a shrinking middle class.

Professor Becker has selected seminal papers covering topics including foundations of income inequality measurement, the social welfare view of inequality and directions for future research on economic inequality.

Along with a new and original introduction, this essential single volume is an indispensable tool for scholars and practitioners alike.
‘. . . Like Cowell's collection, this new volume is a treasure trove. It contains classics such as Lorenz's 1905 'Methods of Measuring the Concentration of Wealth' ( - strange how disconcerting it is to see the Lorenz curve, as originally drawn, on a graph with per cent of total wealth along the horizontal axis, and per cent of population along the vertical). It also contains more recent material, including Foster and Wolfson's 2010 article 'Polarization and the Decline of the Middle Class.’
– Citizens Income

‘This book contains a high-level collection of papers by some of today’s leading distributional analysts. The chapters are well-chosen and are written by respected authors with international profiles. The book will be highly valued as a reference work, by research economists and practitioners, as well as by postgraduate students and professors at universities where distributional measurement theory and application is dealt with at the PhD level.’
– Peter Lambert, University of Oregon, US
36 articles, dating from 1905 to 2010
Contributors include: A. Atkinson, F. Bourguignon, F. Cowell, J. Foster, S.-C. Kolm, E. Maasoumi, A. Sen, A.F. Shorrocks, J.E. Stiglitz, J.A. Weymark
Contents:

Acknowledgements

Introduction Robert A. Becker

PART I THE ECONOMICS OF INCOME INEQUALITY MEASUREMENT: AN OVERVIEW
1. James E. Foster (1985), ‘Inequality Measurement’
2. Joseph Persky (1992), ‘Retrospectives: Pareto’s Law’

PART II THE FOUNDATIONS OF INCOME INEQUALITY MEASUREMENT
A. The Lorenz Curve
3. M.O. Lorenz (1905), ‘Methods of Measuring the Concentration of Wealth’
4. Daniel B. Levine and Neil M. Singer (1970), ‘The Mathematical Relation Between the Income Density Function and the Measurement of Inequality’
5. Joseph I. Gastwirth (1971), ‘A General Definition of the Lorenz Curve’
6. N.C. Kakwani (1977), ‘Applications of Lorenz Curves in Economic Analysis’
7. Rolf Aaberge (2009), ‘Ranking Intersecting Lorenz Curves’

B. The Connection Between Income Inequality and Welfare Economics
8. S. Ch. Kolm ([1969] 2001), ‘The Optimal Production of Social Justice’
9. Anthony B. Atkinson (1970), ‘On the Measurement of Inequality’

C. Mathematical Foundations of Inequality Theory: Majorization
10. G.H. Hardy, J.E Littlewood and G. Polya (1929), ‘Some Simple Inequalities Satisfied by Convex Functions’
11. Miodrag Tomic (2010), ‘Gauss’ Theorem Concerning the Centre of Gravity and its Application’

PART III EXTENDING THE KOLM-ATKINSON APPROACH TO INEQUALITY MEASUREMENT
12. A.B. Atkinson (2008), ‘More on the Measurement of Inequality’
13. Anthony F. Shorrocks and James E. Foster (1987), ‘Transfer Sensitive Inequality Measures’
14. James Davies and Michael Hoy (1994), ‘The Normative Significance of Using Third-Degree Stochastic Dominance in Comparing Income Distributions’
15. Dominique Thon and Stein W. Wallace (2004), ‘Dalton Transfers, Inequality and Altriusm’
16. Ronny Aboudi, Dominique Thon and Stein W. Wallace (2010), ‘Inequality Comparisons when the Populations Differ in Size’

PART IV THE SOCIAL WELFARE VIEW OF INEQUALITY
A. The Welfare Approach
17. Amartya Sen (1974), ‘Informational Bases of Alternative Welfare Approaches’
18. Camilo Dagum (1990), ‘On the Relationship Between Income Inequality Measures and Social Welfare Functions’
19. Karl Mosler and Pietro Miliere (1996), ‘Inequality Indices and the Starshaped Principle of Transfers’

B. Axiomatics and Inequality Measurement
20. Robert Dorfman (1979), ‘A Formula for the Gini Coefficient’
21. Dominique Thon (1982), ‘An Axiomatization of the Gini Coefficient’
22. James E. Foster (1983), ‘An Axiomatic Characterization of the Theil Measure of Income Inequality’
23. Satya R. Chakravarty (2007), ‘A Deprivation-based Axiomatic Characterization of the Absolute Bonferroni Index of Inequality’

PART V DECOMPOSABLE MEASURES AND GENERALIZED INEQUALITY
A. Decomposable Inequality Measures
24. Francis Bourguignon (1999), ‘Decomposable Income Inequality Measures’
25. A.F. Shorrocks (1980), ‘The Class of Additively Decomposable Inequality Measures’
26. Anthony F. Shorrocks (1984), ‘Inequality Decomposition by Population Subgroups’
27. Esfandiar Maasoumi (1978), ‘The Measurement and Decomposition of Multi-Dimensional Inequality’

B. Generalized Gini Indices
28. John A. Weymark (1981), ‘Generalized Gini Inequality Indices’
29. Shlomo Yitzhaki (1983), ‘On an Extension of the Gini Inequality Index’

C. Axiomatics and Generalized Inequality Measures
30. Frank A. Cowell and Kiyoshi Kuga (1981), ‘Inequality Measurement: An Axiomatic Approach’
31. Frank A. Cowell and Kiyoshi Kuga (1981), ‘Additivity and the Entropy Concept: An Axiomatic Approach to Inequality Measurement’

D. Multi-Dimensional Inequality Measures
32. A.B. Atkinson and F. Bourguignon (1982), ‘The Comparison of Multi-Dimensioned Distributions of Economic Status’
33. Kay-Yuen Tsui (1995), ‘Multidimensional Generalizations of the Relative and Absolute Inequality Indices: The Atkinson-Kolm-Sen Approach’
34. Gleb Koshevoy (1998), ‘The Lorenz Zonotope and Multivariate Majorizations’

PART VI DIRECTIONS FOR FUTURE RESEARCH ON ECONOMIC INEQUALITY
35. Joan-Maria Esteban and Debraj Ray (1994), ‘On the Measurement of Polorization’
36. James E. Foster and Michael C. Wolfson (2010), ‘Polarization and the Decline of the Middle Class: Canada and the U.S.’