A DIAGRAMMATIC REPRESENTATION OF INEQUALITY

This article derives implications of Atkinson’s measure of inequality, the equally distributed equivalent income. If every individual gains proportionally to his or her initial income, then the inequality index indicates a move to a more equal distribution in society. Further, a new diagrammatic technique is presented, allowing us to link welfare contours to Lorenz curves using the concept of the equally distributed equivalent income. This technique allows us to judge which distribution associated with crossing Lorenz curves is preferable to society in terms of total welfare. © 1990, Sage Publications. All rights reserved.