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What Kind of Inequality Do You Prefer? Evaluating Measures of Income and Health Inequality Using Choice Experiments

Hardardottir, Hjördis LU ; Gerdtham, Ulf-Göran LU and Wengström, Erik LU (2019) In Working Papers
Abstract
When measuring inequality using conventional inequality measures, ethical assumptions about distributional preferences are often implicitly made. In this paper, we ask whether the ethical assumptions underlying the concentration index for income-related inequality in health and the Gini index for income inequality are supported in a representative sample of the Swedish population using an internet-based survey. We find that the median subject has preferences regarding income-related inequality in health that are in line with the ethical assumptions implied by the concentration index, but put higher weight on the poor than what is implied by the Gini index of income inequality. We find that women and individuals with a poorer health status... (More)
When measuring inequality using conventional inequality measures, ethical assumptions about distributional preferences are often implicitly made. In this paper, we ask whether the ethical assumptions underlying the concentration index for income-related inequality in health and the Gini index for income inequality are supported in a representative sample of the Swedish population using an internet-based survey. We find that the median subject has preferences regarding income-related inequality in health that are in line with the ethical assumptions implied by the concentration index, but put higher weight on the poor than what is implied by the Gini index of income inequality. We find that women and individuals with a poorer health status put higher weight on the poor than men and healthier individuals. Ethically flexible inequality measures, such as the s-Gini index and the extended concentration index, imply that researchers have to choose from a toolbox of infinitely many inequality indices. The results of this paper are indicative of which indices (i.e. which parameter values) reflect the views of the population regarding how inequality should be defined. (Less)
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author
organization
publishing date
type
Working paper
publication status
published
subject
keywords
Socioeconomic inequality in health, Income inequality, Extended concentration index, S-Gini index, Distributional preferences, D31, D63, D90, I14
in
Working Papers
issue
2019:7
pages
53 pages
language
English
LU publication?
yes
id
8cbc3f14-37a0-43cb-a05a-7cc250a2a21f
alternative location
https://swopec.hhs.se/lunewp/abs/lunewp2019_007.htm
date added to LUP
2019-05-16 09:11:58
date last changed
2019-05-17 02:18:30
@misc{8cbc3f14-37a0-43cb-a05a-7cc250a2a21f,
  abstract     = {When measuring inequality using conventional inequality measures, ethical assumptions about distributional preferences are often implicitly made. In this paper, we ask whether the ethical assumptions underlying the concentration index for income-related inequality in health and the Gini index for income inequality are supported in a representative sample of the Swedish population using an internet-based survey. We find that the median subject has preferences regarding income-related inequality in health that are in line with the ethical assumptions implied by the concentration index, but put higher weight on the poor than what is implied by the Gini index of income inequality. We find that women and individuals with a poorer health status put higher weight on the poor than men and healthier individuals. Ethically flexible inequality measures, such as the s-Gini index and the extended concentration index, imply that researchers have to choose from a toolbox of infinitely many inequality indices. The results of this paper are indicative of which indices (i.e. which parameter values) reflect the views of the population regarding how inequality should be defined.},
  author       = {Hardardottir, Hjördis and Gerdtham, Ulf-Göran and Wengström, Erik},
  language     = {eng},
  note         = {Working Paper},
  number       = {2019:7},
  series       = {Working Papers},
  title        = {What Kind of Inequality Do You Prefer? Evaluating Measures of Income and Health Inequality Using Choice Experiments},
  url          = {https://swopec.hhs.se/lunewp/abs/lunewp2019_007.htm},
  year         = {2019},
}