Zenga’s New Index of Economic Inequality, Its Estimation, and an Analysis of Incomes in Italy

26 Pages Posted: 4 Sep 2009 Last revised: 1 Aug 2015

See all articles by Francesca Greselin

Francesca Greselin

Università degli Studi di Milano Bicocca - Dept. of Statistics and Quantitative Methods

Leo Pasquazzi

Università degli Studi di Milano Bicocca

Ricardas Zitikis

Western University

Date Written: September 2, 2009

Abstract

For at least a century academics and governmental researchers have been developing measures that would aid them in understanding income distributions, their differences with respect to geographic regions, and changes over time periods. It is a challenging area due to a number of reasons, one of them being the fact that different measures, or indices, are needed to reveal different features of income distributions. Keeping also in mind that the notions of ‘poor’ and ‘rich’ are relative to each other, M. Zenga has recently proposed a new index of economic inequality. The index is remarkably insightful and useful, but deriving statistical inferential results has been a challenge. For example, unlike many other indices, Zenga’s new index does not fall into the classes of L-, U-, and V -statistics. In this paper we derive desired statistical inferential results, explore their performance in a simulation study, and then employ the results to analyze data from the Bank of Italy’s Survey on Household Income and Wealth.

Keywords: Zenga index, lower conditional expectation, upper conditional expectation, confidence interval, Bonferroni curve, Lorenz curve, Vervaat process

JEL Classification: C13

Suggested Citation

Greselin, Francesca and Pasquazzi, Leo and Zitikis, Ricardas, Zenga’s New Index of Economic Inequality, Its Estimation, and an Analysis of Incomes in Italy (September 2, 2009). Available at SSRN: https://ssrn.com/abstract=1466616 or http://dx.doi.org/10.2139/ssrn.1466616

Francesca Greselin (Contact Author)

Università degli Studi di Milano Bicocca - Dept. of Statistics and Quantitative Methods ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, Milan 20126
Italy

Leo Pasquazzi

Università degli Studi di Milano Bicocca ( email )

Milan
Italy

Ricardas Zitikis

Western University ( email )

1151 Richmond Street
Suite 2
London, Ontario N6A 5B8
Canada

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