Institut für Volkswirtschaftslehre
Growing interest in the analysis of interrelationships between income distribution and economic growth has recently stimulated new theoretical as well as empirical research. Measures such as head-count ratio for poverty index or widely used Gini coefficient are aggregated indicators describing the general extent of inequality and without deeper insight into income distribution among the households. To derive an indicator accounting for income distribution among the income groups, we propose a new approach based on an output oriented DEA model with inputs equal unit and weights restrictions imposed so as to favor higher income share in lower quantiles. We demonstrate the merit of this approach on the quintile income breakdown data of the European countries. Prioritizing lower income groups´ welfare, countries – e.g. Slovenia and Slovakia – can be equally favored by the new proposed indicator while assessed differently by the Gini index. Intertemporal analysis reveals a slight deterioration of income distribution over the period of 2007 – 2016 in a Rawlsian sense.
o.Univ.-Prof. Dr. Mikulas Luptacik
Wirtschaftsuniversität Bratislava, Wirtschaftsuniversität Wien, IWI
Christina Kopetzky (vwl2 [at] aau [dot] at)