DUAL-INDEX MEASUREMENT OF INCOME INEQUALITY

Abstract

This study introduces the concept of unequally distributed income and proposes a dual-index measurement of income inequality that evaluates the magnitude and dispersion of unequally distributed income. We use the Rawlsian index as a magnitude index and employ current income inequality indices as a dispersion index. We describe the properties of the Rawlsian and dispersion indices, and apply these indices to real income data. Further, we show that the Gini dispersion index is a weighted average of Rawlsian indices for the sub-distributions of the unequally distributed income distribution.