Fuzzy measurement of income inequality: Some possibility results on the fuzzification of the lorenz ordering

Summary This paper starts from the premise that the concept of income inequality is ill-defined, and hence, it studies the measurement of income inequality from a fuzzy set theoretical point of view. It is argued that the standard (fuzzy) transitivity concepts are not compatible with fuzzy inequality orderings which respect Lorenz ordering. For instance, we show that there does not exist a max-min transitive fuzzy relation on a given income distribution space which ranks distributions unambiguously according to the Lorenz criterion whenever they can actually be ranked by it. Weakening the imposed transitivity concept, it is possible to escape from the noted impossibility theorems. We introduce some alternative transitivity concepts for fuzzy relations, and subsequently, construct a class of fuzzy orderings which preserve Lorenz ordering and satisfy these alternative transitivities. It is also shown that fuzzy measurement can be used to construct confidence intervals for the crisp conclusions of inequality indices.I wish to thank Ashish Banerjee, Kaushik Basu, Larry Blume, Gary Fields, Semih Koray, Tapan Mitra, Antony Shorrocks, Sinan Unur and two anonymous referees of this journal for insighthul comments and suggestions. I am also grateful to the participants of the 1993 Midwest Mathematical Economics Conference held in University of Wisconsin at Madison and the 2nd International Meeting of the Society for Social Choice and Welfare held in University of Rochester.     

How to control a chaotic economy?

An economic system which exhibits chaotic behaviour has been stabilized on various periodic orbits by use of the Ott-Grebogi-Yorke method. This procedure has been recently applied to controlling chaotic phenomena in physical, chemical and biological systems. We adopt this method successfully for Feichtinger's generic model of two competing firms with asymmetrical investment strategies. We show that the application of this control method to the particular economic process considered brings a substantial advantage: one can easily switch from a chaotic trajectory to a regular periodic orbit and simultaneously improve the system's economic properties. Numerical simulations are presented in order to illustrate the effectiveness of the whole procedure.The work was supported by the Alexander von Humboldt-Stiftung and by the Polish National Council (KBN) Grant No 2 P302 038 04.     

CONSEQUENCES OF MINIMUM WAGE INDEXING

During the 1980s, the minimum wage fell relative to prices and average wages in the U.S. economy. If the minimum to average wage ratio had been constant at the level maintained through the 1970s, the minimum wage would have been $5.51 in 1993. If the 1993 minimum wage had increased to $5.51, payments to minimum wage workers would have increased by an estimated $20.3 billion, and the number of people earning that wage would have risen from 2.0 million to 14.7 million. Elasticity estimates generated from other studies indicate that employment would have fallen 240,000 (4.4%) among 16–19 year olds and 349,000 (3.0%) among 20–24 year olds. Wage payments to minimum wage workers would have substantially increased, but the effect on family income distribution would have been small. Many minimum wage workers are children living with parents or adults in a family with other earners. Consequently, 75% of minimum wage workers account for less than half of their family's income.     

Estimating the environmental costs of electricity: An overview and review of the issues

This paper provides an overview of the issues associated with environmental costing and the specific questions raised by the effort to measure the environmental costs of electricity. It identifies the key methodology questions identified by these studies and discusses their relevance for more general applications of methods to estimate the monetary losses due to environmental externalities.     

THE CASE FOR PAY-AS-YOU-GO PENSIONS IN A SERVICE ECONOMY

The elderly consume more labour‐intensive services than young individuals. This makes them vulnerable to rising costs of services due to higher wages, which can be caused by increased capital accumulation. This paper shows that in a model with a service sector, the golden‐rule capital stock is lower and dynamic inefficiency is more likely to occur than in the conventional one‐sector model. This implies that in many cases, a positive Pay‐As‐You‐Go tax maximises long‐run welfare in a service economy. Calculations based on data from the United Kingdom and the Netherlands show that the long‐run optimal degree of funding coincides with the current situation in these countries.     

Investment in the absence of property rights; the role of incumbency advantages

In many situations the individuals who can generate some output must enter a contest for appropriating this output. This paper analyses the investment incentives of such agents and the role of incumbency advantages in the contest. Depending on the advantages, an increase in the productivity of the investment can decrease or increase the amount of investment. The results are applied to autocrats’ investment behavior and job specific investment in organizations.     

Corporate hyperlink network relationships in global corporate social responsibility system

This study analyzed the hyperlink (co-link) network structure among companies in global Corporate Social Responsibility (CSR) system. This study measured network variables such as density and centrality, including degree centrality, eigenvector centrality, closeness, and betweenness. The results indicated that European companies had relatively central roles in the global CSR system. In addition the higher performing companies are more active their CSR practices. Also, the results revealed that the industrial type of companies was not significantly associated with its CSR practices.