Distorted Lorenz curves: models and comparisons

The economic literature contains many parametric models for the Lorenz curve. A number of these models can be obtained by distorting an original Lorenz curve L by a function h, giving rise to a distorted Lorenz curve L̃ = h o L. In this paper, we study, in a unified framework, this family of curves....

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Bibliographic Details
Published in:Social choice and welfare 2014-04, Vol.42 (4), p.761-780
Main Authors: Sordo, Miguel A., Navarro, Jorge, Sarabia, José María
Format: Article
Language:English
Subjects:
Analysis
Axioms
Distribution functions
Economic Models
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Expected utility
Game Theory
Gini index
Income distribution
Income inequality
Inequality
International Political Economy
Lorenz Curve
Lorenz curves
Original Paper
Parametric models
Perceptual distortion
Poverty
Preferences
Preservation
Probability theory
Public choice
Public Finance
Random variables
Social and Behav. Sciences
Social conditions & trends
Social Policy
Social welfare
Stochastic models
Stochastic processes
Studies
Utility functions
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Summary:The economic literature contains many parametric models for the Lorenz curve. A number of these models can be obtained by distorting an original Lorenz curve L by a function h, giving rise to a distorted Lorenz curve L̃ = h o L. In this paper, we study, in a unified framework, this family of curves. First, we explore the role of these curves in the context of the axiomatic structure of Aaberge (2001) for orderings on the set of Lorenz curves. Then, we describe some particular models and investigate how changes in the parameters in the baseline Lorenz curve L affect the transformed curve L̃ . Our results are stated in terms of preservation of some stochastic orders between two Lorenz curves when both are distorted by a common function.
ISSN:0176-1714
1432-217X
DOI:10.1007/s00355-013-0754-y