Chapter 5: Maximum Inequality: The Case of Categorical Data

In the case of ordered categorical data, the concepts of minimum and maximum inequality are not straightforward. In this chapter, the authors consider the Cowell and Flachaire (2017) indices of inequality. The authors show that the minimum and maximum inequality depend on preliminary choices made before using these indices, on status and the sensitivity parameter. Specifically, maximum inequality can be given by the distribution which is the most concentrated in the top or bottom category, or by the uniform distribution.