English

Representative endowments and uniform Gini orderings of multi-attribute welfare

Applications 2022-11-10 v4

Abstract

For the comparison of inequality and welfare in multiple attributes the use of generalized Gini indices is proposed. Individual endowment vectors are summarized by using attribute weights and aggregated in a spectral social evaluation function. Such functions are based on classes of spectral functions, ordered by their aversion to inequality. Given a spectrum and a set PP of attribute weights, a multivariate Gini dominance ordering, being uniform in weights, is defined. If the endowment vectors are comonotonic, the dominance is determined by their marginal distributions; if not, the dependence structure of the endowment distribution has to be taken into account. For this, a set-valued representative endowment is introduced that characterizes the welfare of a dd-dimensioned distribution. It consists of all points above the lower border of a convex compact in Rd\R^d, while the set ordering of representative endowments corresponds to uniform Gini dominance. An application is given to the welfare of 28 European countries. Properties of PP-uniform Gini dominance are derived, including relations to other orderings of dd-variate distributions such as convex and dependence orderings. The multi-dimensioned representative endowment can be efficiently calculated from data. In a sampling context, it consistently estimates its population version.

Keywords

Cite

@article{arxiv.2103.17030,
  title  = {Representative endowments and uniform Gini orderings of multi-attribute welfare},
  author = {Karl Mosler},
  journal= {arXiv preprint arXiv:2103.17030},
  year   = {2022}
}

Comments

20 pages. A previous version was titled "Representative endowments and uniform Gini orderings of multi-attribute inequality". To appear in Journal of Economic Inequality