Chapter 1 Measuring Segregation: Basic Concepts and Extensions to Other Domains

In a recent paper entitled “On Lateral Thinking,” Atkinson (2011) argued that Economics has benefited not only from borrowing ideas from other disciplines such as physics (e.g., Samuelson's Foundations of Economic Analysis , 1947) or psychology (e.g., the growing importance of behavioral economics) but also from applying ideas that appeared in one subfield of Economics to another domain of Economics. As examples of such a cross-fertilization, Atkinson cites duality theory where cost functions were applied to consumer theory or Harberger's (1962) model of tax incidence that was borrowed from international trade theory. Atkinson in fact cited a sentence from his famous 1970 ( Atkinson, 1970 ) article: “My interest in the question of measuring inequality was originally stimulated by reading an early version of the paper by Rotschild and Stiglitz (1970, 1971)” The same parallelism between uncertainty and inequality had been drawn previously by Serge Kolm in his well-known presentation at the meeting of the International Economic Association in Biarritz, France (see Kolm, 1969 ), which was inspired by his previous work on uncertainty ( Kolm, 1966 ). Atkinson, however, stressed also the need for care in drawing parallels.