14th journées Louis-André Gérard-Varet

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Interpersonal Income Movements
Pauline Mornet

Last modified: 2015-03-15

Abstract


In this paper, we focus on interpersonal income movement. We consider that an individual evaluates his/her change of income over time, not only  according to his/her previous personal situation, but also according to the economic situation of the other individuals in the population. In that way each individual determines how much better/worse his/her situation has become with regard to other individuals' previous situation. By adapting  a recent axiom of weak aggregation (decomposition) introduced in the literature of inequality, we characterize the general structure of interpersonally decomposable income movement measures. Income movement measures consistent with our decomposition process break down into interpersonal within-group and between-group income movement components that are easy to interpret. Furthermore such components provide more information than components ensuing from usual decomposition processes. Finally, we demonstrate that the structure of our interpersonal income movement measures is consistent with some well-known directional income movement measures.

Keywords


Interpersonal Income Movement, Directional Movement, Weak Aggregation.