Author(s)

Johan Fellman

Hanken School of Economics, Helsinki, Finland.

In this study, we reconsider the effect of variable transformations on income inequality. Under the assumption that the theorems should hold for all income distributions, earlier given sufficient conditions are also necessary. Different versions of the conditions are compared. Furthermore, one can prove that the assumption of continuity of the transformations can be implicitly included in the necessary and sufficient conditions, and hence, it can be dropped from the assumptions. The effects of two transformations on income inequality are compared.

Discontinuity, Income Distribution, Income Inequality, Lorenz Dominance, Tax Policy, Transfer Policy

Fellman, J. (2016) Transformations and Lorenz Curves: Sufficient and Necessary Conditions. Theoretical Economics Letters, 6, 442-449. doi: 10.4236/tel.2016.63050.