On the Properties of the Fields’ Index of Inequality

Abstract

This paper is an assessment of the approach to measure inequality suggested by Gary Fields (1987, 1993). Fields’ approach described the change in inequality which occurs in dual economy models when there is enlargement of the high-income sector. According to Fields, inequality during this growth process initially decreases and then increases, depicting a U-pattern in contrast to the inverted-U pattern described by the other inequality indices. We argue that the index and axioms proposed by Fields to generate such a pattern cannot be defined as Lorenz Consistent. Nevertheless, Fields’ approach paves the way towards a new representation of inequality which might be appropriate in a framework where sectors differ in size and income.