Welfare, inequality and the transformation of incomes the case of weighted income distributions

The paper extends previous results on welfare and inequality comparisons when incomes are weighted and the weights are not necessarily equal across the statistical units. A flexible approach to inequality measurement is allowed which admits as particular cases the relative and absolute views. We next identify the individualistic and symmetric transformations that generate and preserve the welfare and inequality rankings of income distributions. The former results fill a gap between the theoretical analysis and the practical measurement of welfare and inequality, while the latter results provide insights for the analysis of redistributive policies. Copyright Springer-Verlag 2002