Compare methods

	Theil Inequality Decomposition	Atkinson Index
Field	Economics	Sociology
Family	Process / pipeline	Process / pipeline
Year of origin	1967	1970
Originator	Henri Theil (1967); decomposition class by Anthony Shorrocks (1980)	Anthony Barnes Atkinson
Type	Decomposable inequality measure	Welfare-based, parameterized inequality index
Seminal source	Theil, H. (1967). Economics and Information Theory. Amsterdam: North-Holland. ISBN: 9780444814630	Atkinson, A. B. (1970). On the measurement of inequality. Journal of Economic Theory, 2(3), 244–263.
Aliases	Theil Index, Theil's T and L, Generalized Entropy Decomposition, Within-Between Inequality Decomposition	Atkinson inequality measure, Atkinson's A, welfare-based inequality index
Related	3	5
Summary	The Theil index, introduced by Henri Theil in 1967 by importing Shannon's information theory into economics, measures income inequality as the divergence between each unit's income share and its population share. Its defining advantage is exact additive decomposability: total inequality splits cleanly into a within-group component (inequality inside each subgroup) and a between-group component (inequality between subgroup means). Theil's T and its companion L (mean log deviation) are the two best-known members of the generalized-entropy class, which Anthony Shorrocks showed in 1980 to be the only inequality measures that are additively decomposable in this way.	The Atkinson index is a welfare-based measure of inequality that incorporates an explicit, analyst-chosen parameter for how much society dislikes inequality. Introduced by Anthony Atkinson in 1970, it asks what fraction of total income could be discarded, under an equal distribution, while leaving social welfare unchanged — making the ethical judgement behind any inequality comparison transparent rather than hidden.