TITLE:
Transformations and Lorenz Curves: Sufficient and Necessary Conditions
AUTHORS:
Johan Fellman
KEYWORDS:
Discontinuity, Income Distribution, Income Inequality, Lorenz Dominance, Tax Policy, Transfer Policy
JOURNAL NAME:
Theoretical Economics Letters,
Vol.6 No.3,
June
6,
2016
ABSTRACT: In this study, we
reconsider the effect of variable transformations on income inequality. Under
the assumption that the theorems should hold for all income distributions, earlier
given sufficient conditions are also necessary. Different versions of the
conditions are compared. Furthermore, one can prove that the assumption of
continuity of the transformations can be implicitly included in the necessary
and sufficient conditions, and hence, it can be dropped from the assumptions.
The effects of two transformations on income inequality are compared.