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Recent growing disparities suggests to move from inequality measures based on comparing the incomes of the less fortunate with the overall mean, as the Gini, to the new Zenga index, which instead contrasts the means of the less and the more wealthy subpopulations. After providing a thorough analysis of the theoretical and practical aspects of obtaining parametric and non-parametric confidence intervals for the Zenga inequality measure, we develop a cross-regional study based on the Swiss Income and Consumption Survey, wave 2005. Results show that coverage accuracy and average length of confidence intervals improve when the parametric model offers a good fit to the data. [ABSTRACT FROM PUBLISHER]

The current financial turbulence in Europe inspires and perhaps requires researchers to rethink how to measure incomes, wealth, and other parameters of interest to policy-makers and others. The noticeable increase in disparities between less and more fortunate individuals suggests that measures based upon comparing the incomes of less fortunate with the mean of the entire population may not be adequate. The classical Gini and related indices of economic inequality, however, are based exactly on such comparisons. It is because of this reason that in this paper we explore and contrast the classical Gini index with a new Zenga index, the latter being based on comparisons of the means of less and more fortunate sub-populations, irrespectively of the threshold that might be used to delineate the two sub-populations. The empirical part of the paper is based on the 2001 wave of the European Community Household Panel data set provided by EuroStat. Even though sample sizes appear to be large, we supplement the estimated Gini and Zenga indices with measures of variability in the form of normal, t-bootstrap, and bootstrap bias-corrected and accelerated confidence intervals. [ABSTRACT FROM AUTHOR]

Zenga (2010a) recently proposed a new three-parameter family of density functions for non-negative variables. Its properties resemble those of economic size distributions: it has positive asymmetry, Paretian right tail and it may be zeromodal, unimodal or even bimodal. In this paper we explore some methods for fitting the new density to empirical income distributions. We will see that D'Addario's invariants method clearly outperforms Pearson's moments method, which does not seem to work well with heavy tailed distributions. Further, we propose some new methods based on the minimization of a measure for the goodness of fit, imposing restrictions on the parameter space to preserve some features of the empirical distribution in the fitted model. We will see that these methods provide very satisfactory results with income distributions from Italy, Swiss, US and UK. [ABSTRACT FROM AUTHOR]

For at least a century academics and governmental researchers have been developing measures that would aid them in understanding income distributions, their differences with respect to geographic regions, and changes over time periods. It is a fascinating area due to a number of reasons, one of them being the fact that different measures, or indices, are needed to reveal different features of income distributions. Keeping also inmind that the notions of poor and rich are relative to each other, Zenga (2007) proposed a new index of economic inequality. The index is remarkably insightful and useful, but deriving statistical inferential results has been a challenge. For example, unlike many other indices, Zenga's new index does not fall into the classes of L-, U-, and V - statistics. In this paper we derive desired statistical inferential results, explore their performance in a simulation study, and then use the results to analyze data from the Bank of Italy Survey on Household Income and Wealth (SHIW). [ABSTRACT FROM AUTHOR]