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DARP Paper
Linear Inequality Concepts and Social Welfare
Udo Ebert
November 1997
Paper No' DARP 033:
Full Paper (pdf)

Tags: inequality concept; ethical inequality measures; decomposability; social welfare

The paper presents an abstract definition of linear inequality concepts leading to linearly invariant inequality measures and characterizes the class of linear concepts completely. Two general methods of deriving ethical measures are proposed. They imply an Atkinson-Kolm-Sen index and a new dual index reflecting the inequality of living standard. Then all separable social welfare orderings which generate linearly invariant measures are characterized. The measures are presented and their general properties discussed. Dual measures prove to be additively decomposable. Linear welfare orderings defined on rank-ordered income vectors are examined. They are consistent with all linear inequality and yield an inequality ordering for every concept.