Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/205675 
Authors: 
Year of Publication: 
2014
Series/Report no.: 
New Zealand Treasury Working Paper No. 14/20
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
This paper explores, in the context of the Atkinson inequality measure, attempts to make interpretations of orders of magnitude transparent. One suggestion is that the analogy of sharing a cake among a very small number of people provides a useful intuitive description for people who want some idea of what an inequality measure ‘actually means'. In contrast with the Gini measure, for which a simple ‘cake-sharing' result is available, the Atkinson measure requires a nonlinear equation to be solved. Comparisons of ‘excess shares' (the share obtained by the richer person in excess of the arithmetic mean) for a range of assumptions are provided. The implications for the ‘leaky bucket' experiments are also examined. An additional approach is to obtain the ‘pivotal income', above which a small increase for any individual increases inequality. The properties of this measure for the Atkinson index are also explored.
Subjects: 
Inequality
Atkinson Measure
Excess Share
JEL: 
D31
D63
ISBN: 
978-0-478-43604-4
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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