Approaches to the Measurement of Horizontal Inequalities

Abstract

Most measures of inequality concern vertical inequality (VI), or inequality among individuals, and are generally confined to a few economic variables such as income, consumption, and sometimes assets. In this arena, Lorenz curves and the Gini coefficient have been extensively and powerfully used as measures of inequality. Much less attention has been paid to measuring inequalities between groups (or horizontal inequalities (HIs)). Although some measures of VI are decomposable into groups, these can be hard to interpret and, moreover, measure the contribution of group inequalities to overall VI rather than group inequality as such. This chapter considers alternative ways of measuring HIs and provides some empirical applications of different measures, showing how far the different measures correlate with one another.