Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/206602 
Year of Publication: 
2019
Citation: 
[Journal:] IZA World of Labor [ISSN:] 2054-9571 [Article No.:] 462 [Publisher:] Institute of Labor Economics (IZA) [Place:] Bonn [Year:] 2019
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Economists use various metrics for measuring income inequality. Here, the most commonly used measures—the Lorenz curve, the Gini coefficient, decile ratios, the Palma ratio, and the Theil index—are discussed in relation to their benefits and limitations. Equally important is the choice of what to measure: pre-tax and after-tax income, consumption, and wealth are useful indicators; and different sources of income such as wages, capital gains, taxes, and benefits can be examined. Understanding the dimensions of economic inequality is a key first step toward choosing the right policies to address it.
Subjects: 
inequality
Gini coefficient
interdecile ratios
JEL: 
C13
D30
D31
D63
J31
Persistent Identifier of the first edition: 
Document Type: 
Article

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