Measuring Inequality - DARP

2 CHAPTER 1. FIRST PRINCIPLES Income shares: society aims to increase the share of national income (orsome other “cake”) enjoyed by a relatively disadvantaged group –such asthe lowest tenth of income recipients. Lowering the ceiling: attention is directed towards limiting the share ofthe cake enjoyed by a relatively advantaged section of the population. Avoidance of income and wealth crystallisation: this just means eliminatingthe disproportionate advantages (or disadvantages) in education,political power, social acceptability and so on that may be entailed by anadvantage (or disadvantage) in the income or wealth scale. International yardsticks: a nation takes as its goal that it should be nomore unequal than another “comparable”nation.Their list is probably not exhaustive and it may include items which youdo not feel properly belong on the agenda of inequality measurement; but itserves to illustrate the diversity of views about the nature of the subject –letalone its political, moral or economic signi…cance –which may be present in areasoned discussion of equality and inequality. Clearly, each of these criteria of“equality” would in‡uence in its own particular way the manner in which wemight de…ne and measure inequality. Each of these potentially raises particularissues of social justice that should concern an interested observer. And if I wereto try to explore just these nine suggestions with the fullness that they deserve,I should easily make this book much longer than I wish.In order to avoid this mishap let us drastically reduce the problem by tryingto set out what the essential ingredients of a Principle of Inequality Measurementshould be. We shall …nd that these basic elements underlie a study of equalityand inequality along almost any of the nine lines suggested in the brief list givenabove.The ingredients are easily stated. For each ingredient it is possible to usematerials of high quality –with conceptual and empirical nuances …nely graded.However, in order to make rapid progress, I have introduced some cheap substituteswhich I have indicated in each case in the following list: Speci…cation of an individual social unit such as a single person, the nuclearfamily or the extended family. I shall refer casually to “persons.” Description of a particular attribute (or attributes) such as income, wealth,land-ownership or voting strength. I shall use the term “income”as a loosecoverall expression. A method of representation or aggregation of the allocation of “income”among the “persons”in a given population.The list is simple and brief, but it will take virtually the whole book to dealwith these fundamental ingredients, even in rudimentary terms.