Advances on Income Inequality and Concentration Measures

Gianni Betti, Achille Lemmi

• Publisher: Routledge
• Year: 2008
• Print ISBN: 9780415443371
• eBook ISBN: 9781134068005
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This impressive collection from some of today's leading distributional analysts provides an overview a wide range of economic, statistical and sociological relationships that have been opened up for scientific study by the work of two turn-of-the-20th-century economists: C. Gini and M. O. Lorenz. The authors include such figues as Barry A

Part I
Introduction

1 Editors’ introduction

Gianni Betti and Achille Lemmi

More than a hundred years ago, in 1905, two relevant scientific events took place: (i) Corrado Gini defended his outstanding doctoral thesis on the statistical analysis of birth by gender at the University of Bologna (Italy) and (ii) Max Otto Lorenz, a year after having been awarded a Ph. D. in Economics at the University of Wisconsin (USA), published a remarkable paper on methods of measuring the concentration of income and wealth, in the former series of the Journal of the American Statistical Association, two events, strictly independent but capable of influencing socio-economic sciences the world over in a permanent way. In fact, the Lorenz paper has greatly influenced further development in probability theory, stochastic dominance and economic analysis, while Gini’s interest in income inequality started with criticism of the Pareto inequality parameter (in the sense of its reinterpretation and mathematical proof as an equality and not an inequality parameter) and continued with his proposition of the famous income inequality ratio published in 1914.

These two analytic elements, namely the Lorenz curve and the Gini inequality ratio, have represented and still represent the basic starting point for every scholar interested in welfare economics, labour economics, development economics, social and economic statistics, quantitative sociology and political science. Moreover, they are of frequent and relevant use in many other scientific disciplines (e.g. engineering, probability theory, environmental analyses, and ecology) that a definition of ‘fundamental scientific’ tools is proper and adequate.

This is the reason why an international scientific conference was organized, in the second half of May 2005, at the University of Siena, so as to celebrate these two eminent social scientists, one hundred years after the events mentioned above had taken place. The success of the conference was greater than expected due mainly to both the quality of the contributions presented and discussed, and to the widespread participation from all over the world (not simply Europe and the USA but also South America, the Middle and Far East and Oceania).

There are at least two reasons for the success of the conference: (i) the quality of the scientific committee of the conference and in particular the contributions of Professors Samuel Kotz and Camilo Dagum, the real brains and hearts of the scientific event, and (ii) the importance of the scientific contribution of Gini and Lorenz ‘…evergreen after 100 years…’ as Barry C. Arnold points out in the second chapter of this book.

Unfortunately Professor Kotz did not attend the conference for health reasons; the presence of his authoritative figure was underlined in the introductory conference speech given by Professor Dagum, charged with such a task given his long-lasting experience of scientific cooperation with the University of Siena and in particular with the Research Centre on Income Distribution of this University. The centre was created with his fundamental support and it now bears his name; he passed away a few months after the conclusion of the conference.

The scientific commemoration of Camilo Dagum has registered various, important and suitable initiatives; this book contains his most complete and updated contribution to the Gini approach to inequality analysis and measurement. His last passionate contribution to Corrado Gini, as passion and humanity, strictly connected to a rigorous scientific method, constantly represented the leading characteristic of Professor Dagum, an authoritative academic scientist capable of creating profound relationships of friendship and of mutual cooperation.

This book is deeply influenced by such an approach to inequality analysis and measurement, in the sense that it represents a modern, multi-faced and truly advanced collection of original papers on inequality within the Gini-Lorenz logical approach. At first sight this choice could be considered a limitation of the book within the framework of inequality analysis, since the latter can be treated following different, important and authoritative, widely diffused alternative approaches.¹ But full comprehensiveness is far from being the main objective of the book; instead it aims at representing the main schools of thought in current scientific research in inequality analysis within the Gini-Lorenz original approach, following a precise fil rouge among original contributions related to (i) innovation in the theory and methods on income inequality and concentration analysis, (ii) inequality decomposition and (iii) worldwide empirical analysis in applied economics.

The book is composed of 18 chapters grouped into four parts. After this Introduction, Chapters 2 and 3, written respectively by Barry C. Arnold and Frank A. Cowell complete the introductory section.

Barry C. Arnold celebrates The Lorenz curve: evergreen after 100 years. The author begins by reminding us how Lorenz’s (1905) suggestion of a graphical manner in which to compare inequality in finite populations in terms of nested curves turned out to be remarkably well accepted. In fact, scholars continue to learn about and to utilize concepts derived from and intimately related to this curve. There is still work to be done related to Lorenz…ordering especially in higher dimensions. Moreover, many, perhaps unexpected, areas in which Lorenz…ordering ideas can ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• List of contributors
• List of figures
• List of tables
• Acknowledgements
• List of abbreviations
• PART I Introduction
• PART II Theory and methods
• PART III Inequality decomposition
• PART IV Lorenz curve and Gini measures in applied economics