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Income Transformation and Income Inequality (published in Advances in Econometrics, Income Distribution & Scientific Methodology: Essays in Honour of Camilo Dagum, Daniel Slottje (ed)(Physica Verlag, 1999, pp.209-232)
We examine the way in which across-the-board additions to incomes are perceived to change inequality. Using a questionnaire we investigate whether subjective inequality rankings correspond to the principle of scale-independence of translation-independence, or to some generalised concept of independence which incorporates the other two principles as special cases. We find evidence that the appropriate independence concept depends on the income levels at which inquality comparisons are made.