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Shaikh and Ragab's `Incomes of the Vast Majority': Some additions and extensions

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  • Peter J. Lambert

    (University of Oregon, USA)

  • Subbu Subramanian

    (Madras Institute of Development Studies, India)

Abstract

The `Vast majority of incomes ratio (VMIR)' $R_0$ is the ratio of the average income $\mu_0$ of a poorest majority $p_0$ of the population to the overall average income $\mu$. Another measure of equality is $E_0\equiv(1-G)$ where $G$ is the Gini coefficient of inequality of the distribution. Shaikh and Ragab (2007, 2008), employing a wide variety of data sets, have shown (among other things), that when $p_0$ is 70 per cent, $R_0$ serves as a uniformly stable and excellent approximation of $E_0$. We extend the Shaikh-Ragab findings in two directions. We explore some analytics of the relationship between $R_0$ and $E_0$ for a lognormal distribution; and we derive a couple of other VMIRs and related measures of welfare which are distinct from but inspired by the Shaikh-Ragab formulations.

Suggested Citation

  • Peter J. Lambert & Subbu Subramanian, 2015. "Shaikh and Ragab's `Incomes of the Vast Majority': Some additions and extensions," Working Papers 354, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2015-354
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    References listed on IDEAS

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    Cited by:

    1. Sreenivasan Subramanian, 2019. "Further tricks with the Lorenz curve," Economics Bulletin, AccessEcon, vol. 39(3), pages 1677-1686.

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