chapter  7
18 Pages

Distributional change

I [1-J-eP[X-"1 dF(X)], p .. - (7.18) where f3 > 0 is a sensitivity parameter (Bosmans and Cowell 2011, Chakravarty and Tyagarupananda 1998, Kolm 1976a, 1976b).

This approach to inequality and its roots in information theory are of particular relevance because they help us to see how information theory can be used as a basis for a serious approach to our topic, distributional change. To see the connection we need to introduce the concept of relative entropy and to relate it to the foregoing discussion.