Daniel J. Slottje

Hang K. Ryu

This book is the culmination of roughly seven years of joint research be tween us. We have both been interested in income inequality measurement for a considerably longer period of time. One author (Ryu) has a back ground in physics. While he was working on his Ph. D. in Physics at M. I. T. he became acquainted with Robert Solow. Professor Solow introduced Ryu to economics. After finishing his Ph. D. in physics, Ryu went on to the Uni versity of Chicago where Arnold Zellner guided him to a dissertation on using orthonormal basis and maximum entropy as estimation methods in econometric applications. The precise definition and examples of orthonormal basis (ONB) and maximum entropy (ME) methods will be given in the book. As it turns out, a natural application of these methods is the study of income distribution. Professor Zellner suggested that Ryu look at some of my joint work with Robert Basmann on functional forms of Lorenz curves as one starting place to do his own research. Ryu requested some of our data and asked for several of our papers with the express pur pose of introducing functional forms of Lorenz curves that Ryu felt would do a better job of approximating the empirical Lorenz curve. Thus, our first introduction was essentially one of Ryu trying to invent a better mousetrap. The interested reader can review the results given in Basmann et al. (1990) and Chapter Four of this book to see if Ryu succeeded.

Theory and Applications

Measuring Trends in U.S. Income Inequality

Baldev Raj

Presented are new methods and new empirical studies on the subject of income inequality and poverty. The purpose of the book is to explore new ways to analyze recent trends in income inequality and poverty, both from the perspective of quantifying poverty and inequality and quantifyig the impact of various factors on the trends in inequality and poverty. The novelty lies in the diversity of empirical approaches used and customers will benefit from learning about different methods.

Income Inequality, Poverty, and Economic Welfare

Articles on econometric methodology with special reference to the quantification of poverty and economic inequality are presented in this book. Poverty and inequality measurement present special problems to the econometrician, and most of these papers analyze how to attack those problems. The topics and contributions in the book are a very good representation of Camilo Dagum's astounding diversity of interests and overall eclecticism. Several of the authors are leading pioneers in econometric methodology. Several others are pioneers in economic theory and others are the leading applied economists in income distribution analysis in the world. The topics accurately reflect Camilo Dagum's breadth of understanding across varios economic sub-fields, all complex in nature.

Daniel J. Slottje

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