ABSTRACT
In this chapter we look at what an equitable distribution is and how equity can be measured. The main purpose of measuring equity is to understand how incomes generated in the economy affect people’s welfare. Equity, therefore, does not just measure the dispersion in the distribution of income; rather, it is a normative concept and has to be linked with social welfare. Measures of equity discussed in this chapter are, therefore, linked to various social welfare functions proposed in the literature.
