Single Crossing Lorenz Curves and Inequality Comparisons

Thibault Gajdos (1, 2)

1 CREST - Centre de Recherche en Économie et Statistique
2 EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative

Since the order generated by the Lorenz criterion is partial, it is a natural question to wonder how to extend this order. Most of the literature that is concerned with that question focuses on local changes in the income distribution. We follow a different approach, and define uniform $\alpha$-spreads, which are global changes in the income distribution. We give necessary and sufficient conditions for an Expected Utility or Rank-Dependent Expected Utility maximizer to respect the principle of transfers and to be favorable to uniform $\alpha$-spreads. Finally, we apply these results to inequality indices.

Mots clés: Inequality measures; Intersecting Lorenz Curves; Spreads

Domaines: Economies et finances

Thibault Gajdos. Single Crossing Lorenz Curves and Inequality Comparisons. Mathematical Social Sciences, 2004, 47 (1), pp.21-36. ⟨10.1016/S0165-4896(03)00078-7⟩. ⟨halshs-00086028⟩