Inequality and welfare

Abstract

This chapter provides an integrated way of approaching inequality measurement from a normative viewpoint, by using the notion of social evaluation function, instead of that of social welfare function. A social evaluation function is a mapping that is defined directly on the space of income distributions, without going through the intermediate step of individual utilities. This notion permits extending the standard normative approach to inequality and provides a general framework in which all the inequality indices can be confronted in terms of the properties that imply on this social evaluation function. Besides, we introduce here the notion on multidimensional inequality and welfare, that applies when more than one relevant dimension is involved. We illustrate this venue by means of the Human Development Index.