Instruct: Identify the main and secondary category of Arxiv papers based on the titles and abstracts
Query: Rawls' Fairness, Income Distribution and Alarming Level of Gini
  Coefficient   The argument that the alarming level of Gini coefficient is 0.4 is very
popular, especially in the media industry, all around the world for a long
time. Although the 0.4 standard is widely accepted, the derivation of the value
lacks rigid theoretical foundations. In fact, to the best of our knowledge, it
is not based on any prevalent and convincing economic theories. In this paper,
we incorporate Rawls' principle of fair equality of opportunity into
Arrow-Debreu's framework of general equilibrium theory with heterogeneous
agents, and derive the alarming level of Gini coefficient formally. Our theory
reveals that the exponential distribution of income not only satisfies Pareto
optimality, but also obeys social fairness in Rawls' sense. Therefore, we
specify the maximal value of the Gini coefficient when income follows
exponential distribution as a possible alarming level. Our computations show
that the alarming level should be specified at least equal or larger than 0.5
rather than 0.4. We empirically investigate if our model receives support from
a large data set of all kinds of countries all over the world from Word Bank in
1990, 1995, 2000 and 2005 using the distribution fitting and statistical
decision methodology. The results suggest that the value of 0.4 is around the
mean of the Gini coefficients, corresponding to the most probable event in a
peaceful world, rather than the alarming level, while the two-sigma rule shows
that in our sample the alarming levels are all larger than 0.5, conforming to
the predictions of our theory.

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The categories of this paper are: math-ph
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The categories of this paper are: nlin
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The categories of this paper are: chao-dyn
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The categories of this paper are: astro-ph
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The categories of this paper are: gr-qc
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The categories of this paper are: hep-lat
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The categories of this paper are: mtrl-th
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The categories of this paper are: chem-ph
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The categories of this paper are: quant-ph
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The categories of this paper are: nucl-th
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The categories of this paper are: q-bio
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The categories of this paper are: alg-geom
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The categories of this paper are: cs
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The categories of this paper are: eess
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The categories of this paper are: comp-gas
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The categories of this paper are: dg-ga