B. Atkinson’s inequality measure (or Atkinson’s index)

This is the most popular welfare-based measure of inequality. It presents the percentage of total income that a given society would have to forego in order to have more equal shares of income between its citizens. This measure depends on the degree of society aversion to inequality (a theoretical parameter decided by the researcher), where a higher value entails greater social

utility or willingness by individuals to accept smaller incomes in exchange for a more equal distribution. An important feature of the Atkinson index is that it can be decomposed into within and between-group inequality. Moreover, unlike other indices, it can provide welfare implications of alternative policies and allows the researcher to include some normative content to the analysis