Economists use various metrics for measuring income inequality. Here, the most commonly used measures—the Lorenz curve, the Gini coefficient, decile ratios, the Palma ratio, and the Theil index—are discussed in relation to their benefits and limitations. Equally important is the choice of...

Economists use various metrics for measuring income inequality. Here, the most commonly used measures-the Lorenz curve, the Gini coefficient, decile ratios, the Palma ratio, and the Theil index-are discussed in relation to their benefits and limitations. Equally important is the choice of what...