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Atkinson index

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A measure of income inequality. Define the equally distributed equivalent income, MEDE, as the level of income that if given to all households generates the same level of social welfare as the current income distribution. If the marginal utility of income falls with income then MEDE is less than the mean level of income, μ, whenever there is income inequality. The Atkinson index, A, is then defined by . A higher value of A represents greater inequality. See also Gini coefficient; Lorenz curve.

Subjects: Social sciencesEconomics

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