Compendium: A global directory to indicator initiatives

Initiative Details

Title of Initiative Inequality Measurement (focus: entropy measures)
Lead Organization(s) Goetz Kluge
Description of Goal To promote an understanding of entropy and its application to inequality measurement in social sciences. In 1998 Amartya Sen was awarded the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. Sen, a representative of welfare economics since many years, wrote in 1973: "A perceived sense of inequity is a common ingredient of rebellion in societies." Distributional justice is a key to the sustainable development of any society. Therefore it is important to observe how resources are distributed within society. Inequality is a special case of inequity (Coulter). How do we measure inequality? How does one express inequal distribution of resources with a simple indicator? Several "coefficients" and "indices" are used in econometrics and social sciences. By aggregating data from tables of resource distributions into a single number, these inequality measures can provide concise indicators for the inequality of wealth and income distribution as well as other ecomomic and social parameters. The most popular inequality measure is the "Gini index". More recently, the "Theil measure" has become better known, a measure which is based on the concept of entropy. Both of these measures are explained in my personal web pages. Spreadsheets are provided there as well. The focus of these web pages, however, is the use of 'entropy' in measuring and interpreting inequality. My own entropy measures relating to the measures of Theil, MacRae and Kullback-Liebler is introduced. By JEL classification all normalized redundancies and relative inequality measures described in this publication belong to C43 "Index Numbers and Aggregation". This topic also is related to I32 "Measurement and Analysis of Poverty", J31 "Wage Level and Structure ..." and N3 "Labor, Demography, Education, Income, and Wealth". Related to Entropy are the classifications Q2-Q4 within "... Resource Economics".
Geographic Scope Global
Framework for Indicator Set inequality measures from: Gini, Hoover, Kullback-Liebler, MacRae, Theil Geographic scope is: Global (Most of the publication is written in English. A few pages focusing on Germany are written in German, i.e. a proposal on how to include regular reporting on income inequality into the annual report of the German federal bureau of statistics.)
Partners For a review of Goetz Kluge's Entropy and Inequality Measures work see The Scout Report for Bussiness and Econmics' web page at: http://scout.cs.wisc.edu/scout/report/bus-econ/1998/be-981022.html (word search: 'entropy')
Progress to date/future areas of work project finished
Timeframe 1996 to 1998, some updates in 1999
Presentation of the information and indicators HTML documents, spreadsheets, graphics
Publications exclusively web published
Initiative Locations Western Europe
Contact Person Goetz Kluge
Title Communications Engineer
Address Schornstrasse 4, D-81669 Munich, Germany
Fax Number +49-89-4802339
Telephone Number +49-89-4802339
Email 71520.3515@compuserve.com
Website http://ourworld.compuserve.com/homepages/SMIPP/frmentro.htm
Public Access to Supporting Data no