A Dominance Criterion for Measuring Income Inequality from a Centrist View: The Case of Australia
22 Pages Posted: 21 Feb 2012
Date Written: February 2012
This paper introduces a new Lorenz dominance criterion that allows ranking income distributions according to centrist measures à la Seidl and Pfingsten (1997). In doing so, it defines α-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 centrist value judgments.
Keywords: Income distribution, Lorenz dominance, intermediate inequality indices, Ray invariance
JEL Classification: D63
Suggested Citation: Suggested Citation