Development, Impact & Global Frameworks
Atkinson index
A welfare-based measure of income inequality that expresses how far actual income falls short of the level that, if equally shared, would deliver the same social welfare.
Definition
A measure of inequality built on the "equally distributed equivalent" (EDE) income: the income level that, if received by everyone, would produce the same social welfare as the actual distribution. The index is A = 1 − (EDE/mean); it ranges from 0 (perfect equality) towards 1 (maximum inequality), with higher values indicating greater inequality.
References
Definition via equally distributed equivalent income; index formula and interpretation.
EDE concept; inequality-aversion parameter ε as an explicit value judgement; weighting of lower incomes.
Overview
What it means
Unlike the Gini coefficient, the Atkinson index makes its social values explicit through an inequality-aversion parameter (ε): the higher ε, the more weight is placed on the lower end of the distribution. The same income gap therefore yields different index values depending on how much society cares about the poorest — a transparency about value judgements that other measures lack.
How it is used
Development economists and institutions such as the World Bank and UNDP use Atkinson measures (commonly at ε = 0. 5, 1 or 2) in cross-country inequality analysis; the index also underpins the welfare logic of inequality-adjusted human development measures.
Why it matters
How inequality is measured shapes what sustainability and development policy targets. The Atkinson index makes explicit that distributional judgements are built into measurement — useful in debates about inclusive growth and leaving no one behind.
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