Book: On Economic Inequality

Overview
Amartya Sen offers a systematic and rigorous examination of how economic inequality can be measured and morally assessed. The book develops a conceptual framework that links measurement techniques to ethical principles, arguing that what counts as "inequality" depends on value judgments about social welfare. Rather than treating indices as neutral statistics, the analysis treats them as institutional choices that embody priorities about fairness and the relative importance of different parts of the distribution.

Core concepts and approach
Sen frames the measurement problem through social welfare comparisons: distributions of income must be ranked according to socially acceptable criteria. He insists that meaningful comparison requires explicit axioms that capture intuitive ethical demands, such as treating individuals symmetrically and preferring higher incomes when everybody else is held fixed. The approach is axiomatic and comparative, showing how different principles interact and what kinds of indices they justify. This perspective clarifies the unavoidable normative content of inequality measurement.

Properties of inequality measures
A central contribution is the clear statement and use of desiderata for inequality measures, including anonymity (individuals are treated impartially), monotonicity (reductions in someone's income that do not improve others' should not reduce measured inequality), the transfer or Pigou-Dalton principle (progressive transfers reduce inequality), and population and scale considerations. Sen explores how these properties can be combined, which are compatible, and which lead to distinct kinds of indices. The discussion shows why no single number can capture all reasonable concerns and why choices about sensitivity to changes at the bottom or top of the distribution matter.

Indices and technical comparisons
The book compares prominent indices, such as the Gini coefficient, generalized entropy measures, the Atkinson class, and other measures rooted in social welfare functions, paying attention to their mathematical form and empirical implications. Sen analyzes how each index weights different income ranges and how parameters encode degrees of inequality aversion. He also treats decomposability, showing when an aggregate measure can be broken into within-group and between-group components, and why that property is important for policy evaluation and subgroup analysis.

Normative implications and measurement limits
Beyond technical assessment, Sen emphasizes the normative choices embedded in measurement practice. Income is a proxy for well-being, and reliance on income alone can mask differences in needs, nonmarket factors, and opportunities. He argues for awareness of what information is missing and for cautious interpretation of indices when welfare, commodities, or capabilities diverge from income. This insistence on ethical transparency links measurement to broader questions about justice and social priorities.

Influence and relevance
The work shaped subsequent research on inequality and poverty by clarifying foundational issues and by encouraging explicit, axiomatic thinking about indices. Its critique of naive positivism and its emphasis on normative clarity informed later developments in welfare economics, poverty measurement, and Sen's own capability approach. The book remains a key reference for anyone concerned with the methodological and moral underpinnings of quantifying economic disparities.