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Measures of Inequality

Paul D. Allison
American Sociological Review
Vol. 43, No. 6 (Dec., 1978), pp. 865-880
Stable URL: http://www.jstor.org/stable/2094626
Page Count: 16
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Measures of Inequality
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Abstract

Although measures of inequality are increasingly used to compare nations, cities, and other social units, the properties of alternative measures have received little attention in the sociological literature. This paper considers both theoretical and methodological implications of several common measures of inequality. The Gini index is found to satisfy the basic criteria of scale invariance and the principle of transfers, but two other measures--the coefficent of variation and Theil's measure--are usually preferable. While none of these measures is strictly appropriate for interval-level data, valid comparisons can be made in special circumstances. The social welfare function is considered as an alternative approach for developing measures of inequality, and methods of estimation, testing, and decomposition are presented.

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