Characterizations of Lorenz Curves and Income Distributions

Posted: 30 Oct 2000

See all articles by Rolf Aaberge

Rolf Aaberge

Statistics Norway; Institute for the Study of Labor (IZA); Deaprtment of Economics

Abstract

The purpose of this paper is to propose and justify the use of a few measures of inequality for summarizing the basic information provided by the Lorenz curve. By exploiting the fact that the Lorenz curve can be considered analogous to a cumulative distribution function it is demonstrated that the moments of the Lorenz curve generate a convenient family of inequality measures, called the Lorenz family of inequality measures. In particular, the first few moments, which often capture the essential features of a distribution function, are proposed as the primary quantities for summarizing the information content of the Lorenz curve. Employed together these measures, which include the Gini coefficient, also provide essential information on the shape of the income distribution. Relying on the principle of diminishing transfers it is shown that the Lorenz measures, as opposed to the Atkinson measures, have transfer-sensitivity properties that depend on the shape of the income distribution.

Suggested Citation

Aaberge, Rolf, Characterizations of Lorenz Curves and Income Distributions. Available at SSRN: https://ssrn.com/abstract=238588

Rolf Aaberge (Contact Author)

Statistics Norway ( email )

N-0033 Oslo
Norway

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Deaprtment of Economics ( email )

Norway

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
896
PlumX Metrics