A general class of additively decomposable inequality measures

This paper presents and characterizes a two-parameter class of inequality m easures that contains the generalized entropy measures, the variance of log arithms, the path independent measures of Foster and Shneyerov (1999) and s everal new classes of measures. The key axiom is a generalized form of addi tive decomposability which defines the within-group and between-group inequ ality terms using a generalized mean in place of the arithmetic mean. Our c haracterization result is proved without invoking any regularity assumption (such as continuity) on the functional form of the inequality measure; ins tead, it relies on a minimal form of the transfer principle - or consistenc y with the Lorenz criterion - over two-person distributions.