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The most widely used measure for studying social, economic, and health inequality is the Gini index/ratio. Whereas other measures of inequality possess certain useful characteristics, such as the straightforward decomposability of the generalized entropy measures, the Gini index has remained the most popular, at least in part due to its ease of interpretation. However, the Gini index has a limitation in measuring inequality. It is less sensitive to how the population is stratified than how individual values differ. The twin purposes of this paper are to explain the limitation and to propose a model-based method—latent class/clustering analysis for understanding and measuring inequality. The latent cluster approach has the major advantage of being able to identify potential “classes” of individuals who share similar levels of income or one or more other attributes and to assess the fit of the model-based classes to the empirical data, based on different cluster distributional assumptions and the number of latent classes. This paper distinguishes class inequality from individual inequality, the type that is better captured by the Gini. Once the classes are estimated, the membership of estimated classes obtained from the best fitting model facilitates the decomposition of the Gini index into individual and class inequality. Class inequality is then measured by two relative stratification indices based on either the relative size of the Gini between-class components or the relative number of stratified individuals. Therefore, the Gini index is extended and assisted by model-based clustering to measure class inequality, thereby realizing its great potential for studying inequality. Income data from France and Hungary are used to illustrate the application of the method. INSETS: Figure 1. Gini indices and Lorenz curves for income data...;Figure 2. Empirical income distribution of France in 1990...;Figure 3. Income clustering in France, 1990.;Figure 4. Income clustering in Hungary, 1992. [ABSTRACT FROM AUTHOR]

This paper is intended as a contribution to the formal theory of stratification systems. The paper has five sections. In Section I, a method for analytically inducing an order over a multi-dimensional status is discussed. It is believed that such a technique can aid in the specification of conceptual tasks within stratification theory, as well as serve as a baseline in actual measurements. It is subsequently employed in the axiomatic work of Sections 3 and 4. In Section 2, there is a brief discussion of the axiomatic method as a prelude to the system developed in the following two sections. In Section 3, the axioms are stated. In Section 4, various elementary consequences of the axioms are shown; most importantly, various concepts which are intuitively important in stratification theory are shown to be definable (e.g., a class system with a determinate number of classes). Finally, in Section s, there is a concluding discussion of the picture of stratification which emerges within this work. [ABSTRACT FROM AUTHOR]

IN A RECENT paper Mr. Runciman concludes by inviting replies to his argument that it is logically and conceptually useful to employ the tripartite distinction between `class' `status' and `power' in the analysis of social stratification. Mr. Runciman does not, of course, deny the existence of links between these three dimensions, but suggests that such links must be seen contingent empirical relationships and not necessary logical ones. I hope that the following paper will provide such a reply. It must be clear that the following criticism is directed, in the main, to those parts of the paper in which Mr. Runciman is concerned with the logical and conceptual problem. The essay in question also contains a clear and valuable assessment of the problems encountered in any attempt to measure the three types of inequality. In the first part of the paper I propose to give a critical assessment of certain central aspects of Mr. Runciman's argument and, in the second part, I will put forward a very brief formulation of what I consider to be a more meaningful alternative view of the relationships between class, status, and power. [ABSTRACT FROM AUTHOR]