Measuring regional inequality: to weight or not to weight?

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Abstract

Measuring regional inequality: to weight or not to weight? Spatial Economic Analysis. When estimating regional inequality, many economists use inequality indices weighted by regions’ proportion of the national population. Although this approach is widespread, its adequacy has not received attention in the regional science literature. This paper proves that such an approach is conceptually inconsistent, yielding an estimate of interpersonal inequality among the whole population of the country rather than an estimate of regional inequality. Nevertheless, as a measure of interpersonal inequality, such an estimate is very rough (even misleading) and does not always have an intuitive interpretation. Moreover, population-weighted inequality indices do not meet the requirements for an adequate measure of inequality.

Original languageEnglish
Pages (from-to)36-59
Number of pages24
JournalSpatial Economic Analysis
Volume13
Issue number1
DOIs
Publication statusPublished - 2 Jan 2018

Keywords

  • inequality axioms
  • inequality index
  • weighting by population
  • Williamson coefficient of variation

OECD FOS+WOS

  • 5.02.GY ECONOMICS

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