An integrated approach for the measurement of inequality, poverty, and richness

We propose a new and integrated approach to the measurement of inequality in income distribution, poverty, and richness. The proposed broad set of indicators is neutral and easy to calculate. The method allows a specific interpretation of the results, a decomposition according to households’ characteristics, and an immediate comparison of the results between different countries and time periods. We illustrate the application of the proposed measures and their decomposition based on evidence from Portugal. In addition, we characterize households in accordance with their position in the income distribution.