On the Absolute and Relative Differentials Orderings and their Representations

Abstract

In some situations, Lorenz ordering (LO) appears to be a disputable inequality criterion. Apparently, there exist some paradoxical situations where the Lorenz criterion fails to rank alternative income distributions. Two sub-orderings of LO, the absolute differentials ordering (ADO) and the relative differentials ordering (RDO), have been introduced and studied as suitable alternative inequality criteria. The classes of functions consistent with such rankings are identified.