Intermediate inequality and welfare : the case of Spain, 1980-81 to 1990-91

Abstract

We introduce a new centrist or intermediate inequality concept, between the usual relative and absolute notions, which is shown to be a variant of the a-ray invariant inequality measures in Pfingsten and Seidl (1994). We say that distributions x and y have the same (x, 7I")-inequality if the total income difference between them is allocated among the indivuals as follows: 71" percent preserving income shares in x, and (l - 71") percent in equal absolute amounts. This notion can be made as operational as current standard methods in Shorrocks (1983). The methodology is illustrated, in the first empirical application of centrist concepts, in the comparison of the standard of living in Spain between 1980-81 and 1990-91.