Describe any 3 measures of Inequality For each measure expla

Describe any 3 measures of Inequality. For each measure, explain whether it satisfies the axioms of 1) Anonymity, 2) Population invariance, 3) Relative income principle, 4) Dalton principle

Solution

Three measures of income inequality can be explained as follows:

Briefly, the four principles of measuring inequality can be described as follows:

From the above mentioned measures of inequality, Range satisfies the first three principles, but fails to satisfy the Dalton’s principle.

Coefficient of Variation and Gini Coefficient satisfy all the four principles mentioned above and are said to be ‘Lorenz Consistent’.