Modelling Inequality with a Single Parameter

  • J. M. Henle
  • N. J. Horton
  • S. J. Jakus
Part of the Economic Studies in Equality, Social Exclusion and Well-Being book series (EIAP, volume 5)


We argue that the Lorenz curve for income is well-modelled by members of the one-parameter family of functions:
$$ \left\{ {y = \left( {1 - \left( {1 - r} \right)^k } \right)^{\frac{1}{k}} } \right\} $$
. We justify this statement with data from the Luxembourg Income Study. The family of curves arises from a dynamic model of income growth, in which the parameter k has a direct economic interpretation.


Single Parameter Sensitivity Factor Income Growth Lorenz Curve Aggregate Income 
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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  • J. M. Henle
    • 1
  • N. J. Horton
    • 1
  • S. J. Jakus
    • 1
  1. 1.Department of Mathematics and StatisticsSmith CollegeUSA

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