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, n)-inequality if the total income difference between then is allocated among the individuals as follows: 1001t percent preserving income shares in x, and 100(1-1t) per cent in equal absolute amounts. This notion can be made as operational as current standard methods in Shorrocks (1983). In the first empirical application of centrist concepts in the literature, the methodology is applied to the comparison of 1980-81 and 1990-91 distributions of household expenditures in Spain.