Title

Comparisons of utility inequality and income inequality

Department

Economics, Finance and Quantitative Analysis

Document Type

Article

Publication Date

5-1-2019

Abstract

A simple theoretical model is developed and analyzed to investigate the possible relationships between income inequality and utility inequality. Measuring utility inequality and income inequality with Gini coefficients, it is argued that there need not be any relation whatsoever between the realized levels of inequality in these two distinct outcomes. That is, a high level of income inequality could result when there is either equally high or absolutely no utility inequality, and a low level of income inequality could result when there is either no utility inequality or a relatively high degree of utility inequality. Consequently, if what we are actually concerned with is inequality in utility or well-being, observations on income inequality might be meaningless.

Journal

Economics Letters

Journal ISSN

0165-1765

Volume

178

First Page

18

Last Page

20

Digital Object Identifier (DOI)

10.1016/j.econlet.2019.02.015

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