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Inequality in the relative differential sense with continuous distributions
Authors:Zhengli Gu  Paul Madden
Institution:(1) Business Management Department, China Continent Property and Casualty Insurance Company, Ltd, 36th Floor, World Plaza, 855 South Pudong Road, Shanghai, 200120, People’s Republic of China;(2) School of Social Sciences, University of Manchester, Manchester, M13 9PL, UK
Abstract:Existing literature has studied the relative differential inequality (RDI) concept as an inequality comparison for discrete distributions, where RDI dominance occurs if there is Lorenz dominance between the distributions for all subsets of individuals of corresponding rank. The paper investigates RDI in the context of continuous distributions, providing continuous counterparts to existing discrete results, and others, including discussion of the uniform, Pareto and log-normal families of continuous distributions. The usefulness of RDI for comparative static analysis in theoretical economic models based on continuous distributions is indicated.
Keywords:Lorenz inequality  Relative differential inequality
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