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Intersecting generalized Lorenz curves and the Gini index

Claudio Zoli
Social Choice and Welfare
Vol. 16, No. 2 (February 1999), pp. 183-196
Published by: Springer
Stable URL: http://www.jstor.org/stable/41106299
Page Count: 14
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Intersecting generalized Lorenz curves and the Gini index
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Abstract

As is well known, the use of the Gini coefficient in comparisons is inconsistent with an utilitarian approach. This paper analyzes the Gini coefficient's normative significance in welfare comparisons evaluating income distributions according to Yaari dual social welfare function. When generalized Lorenz curves cross once, the Gini coefficient is decisive in determining welfare rankings if we strengthen the Principle of Transfers applying a Positional version of the Principle of Transfer Sensitivity. This result can also be extended to the case of multiple crossings.

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