Sen states that a person's position in a social arrangement can be judged in two different perspective. One he called the actual achievement and other is the freedom to achieve. achievement is concerned with what we manage to accomplish, and freedom with the real opportunity that we have to accomplish what we have value. He argument that the two need not be congruent. Inequality can be viewed in terms of achievement and freedoms. they are not coincide. The distinction between achievement and freedom is central to social evaluation.
Now we turns on real issue. Most of the economies is living in the atmosphere of capitalist rule, who advocates the equal opportunity to each person. The real behavior is just opposite. It creates a lot off inequality in the society and abandon the individual access to resource. Thus, the opportunity of real and equal opportunity disappeared. The question is how can real opportunity be materialized in a capitalist economy?
Use the Oaxaca decomposition to compare a target group (e.g. subject to discrimination) with a reference group.
Inequality is a relative concept measured at a polnt in time . It show the relative income at a point in time so long as it is a continous variable it can be measured in real terms
Sen and Nussbaum's work on the Capabilities Approach to social justice, plus the books: "The Capabilities Approach: Concepts, Measures and Applications" Commin, Qizilbash, Alkire (eds) (2008) and Disadvantage by Wollf and DeShalitt offer some arguments and means of measuring inequality in non-income related terms. Inequality is then still relative, but measured in a way that provides more information about what that inequality actually means for people i.e. goods inequality isn't unjust by definition, but an unjustifiable inequality of opportunities or freedoms is (exceptions being incarceration for example, but even that isn't as clear cut if we consider that crime often flows from initial disadvantage or inequality).
This is a complicated issue and I want to point out only one topic. In my book (attached below, p. 134), I proved that the share of national income for the poorest decile correlates negatively with the share of national income for the richest decile. Because the share of national income for the poorest decile is very small compared to the share of national income for the richest decile it cannot cause this dependency. My conclusion is that the reason is political and I also found that Latin America had the highest income inequality.
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