Abstract
We axiomatically characterize the Theil ordering of income inequality. In addition to the uncontroversial axioms of anonymity, homogeneity, replication invariance, strong directedness, and a standard continuity property, we appeal to both an independence and a decomposability axioms. These two axioms are ordinal implications of Theil decomposability, the central axiom in previous characterizations of the Theil index. To the best of our knowledge, the present is the first fully ordinal characterization of this index.
| Original language | English |
|---|---|
| Pages (from-to) | 757-776 |
| Number of pages | 20 |
| Journal | Economic Theory |
| Volume | 54 |
| Issue number | 3 |
| DOIs | |
| State | Published - 1 Nov 2013 |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 1 No Poverty -
SDG 10 Reduced Inequalities
Keywords
- Axiomatic characterization
- Decomposability
- Income inequality
- Theil index
ASJC Scopus subject areas
- Economics and Econometrics
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