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Lorenz map, inequality ordering and curves based on multidimensional rearrangements (2203.09000v4)

Published 17 Mar 2022 in econ.EM and stat.ME

Abstract: We propose a multivariate extension of the Lorenz curve based on multivariate rearrangements of optimal transport theory. We define a vector Lorenz map as the integral of the vector quantile map associated with a multivariate resource allocation. Each component of the Lorenz map is the cumulative share of each resource, as in the traditional univariate case. The pointwise ordering of such Lorenz maps defines a new multivariate majorization order, which is equivalent to preference by any social planner with inequality averse multivariate rank dependent social evaluation functional. We define a family of multi-attribute Gini index and complete ordering based on the Lorenz map. We propose the level sets of an Inverse Lorenz Function as a practical tool to visualize and compare inequality in two dimensions, and apply it to income-wealth inequality in the United States between 1989 and 2022.

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