A Note on Gary Fields' Index of Income Inequality
JEL Classification D31, D63
Department of Economics, Trinity College, Dublin 2, Ireland.
AbstractThis paper is an assessment of the approach suggested by Gary
Fields for measuring inequality in an economy with high-income sector
enlargement. This approach describes the change in inequality according to a
U-pattern, instead of the inverted U-pattern described by other indices. We
argue that Fields index is not consistent with Lorenz Dominant Criterion (LDC)
because of its failure to adequately describe the distributive change due to
rank preserving transfers. The properties of Fields' index and of the modified
version of the index F2, the behaviour, the originality and
the limits of this approach in inequality measurement are tested and briefly
AcknowledgementsResearch for this work has been carried out during a
period as visiting researcher at Michigan State University and during my M.Litt.
studies at Trinity College. I am really grateful to G. Vaggi and W.J. Samuels
who made this work possible and helped me with their comments. I have also
benefited from comments given by G. Fields, B. Nolan, F. O'Toole, S. Targetti
Lenti and two anonymous referees. I am grateful to the University of Pavia for
supporting this work with a post-degree studentship "Borsa di studio per il
perfezionamento all'estero, Area scienze economico-statistiche".