Correcting the concentration index: A comment

In a recent article in this journal, Erreygers [Erreygers, G., 2008. Correcting the concentration index, Journal of Health Economics] has proposed a new measure of income-related inequality to overcome three shortcomings of the concentration index (CI). I think Erreygers is absolutely right to probe on these issues, and si welcome his generalization of my normalization which was specific to the case of a binary health indicator. However, in have misgivings about his paper. His goal of correcting to CI so to make it usable with interval-scale variables seems misguided. The CI reflects a commitment on the part of the analyst to measuring relative inequality. Armed only with an interval-scale variable, one simply has to accept that one can meaningfully measure only differences and therefore settle for measuring absolute inequality. Erreygers, index inevitably ends up as a measure of absolute inequality. His objection to my approach to getting round the bound problem is that my normalization of the CI does not produce a measure of absolute inequality. But that was never my intention! In this comment i also show that - somewhat paradoxically at first glance - my index is also not a pure index of relative inequality. This seems to be an inevitable consequence of tackling the bounds issue. (C) 2008 Elsevier B.V. All rights reserved.