IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v191y2022i1d10.1007_s11127-022-00957-7.html
   My bibliography  Save this article

A Tullock Index for assessing the effectiveness of redistribution

Author

Listed:
  • Luke Petach

    (Belmont University)

Abstract

I propose two alternative versions of a “Tullock Index” for assessing the effectiveness of income or wealth redistribution. In the spirit of Atkinson’s (J Econ Theory 2:244–263, 1970) inequality index, the Tullock Index is constructed with reference to either (A) the maximum inequality reduction attainable with current transfer spending or (B) the minimum transfer spending necessary to achieve current post-transfer inequality. Using Current Population Survey (CPS) microdata from 1988 to 2014, I construct annual estimates of the Tullock Index at the national level for the United States. The Tullock Index is increasing over that period, suggesting that redistribution has become less effective in reducing inequality. State-level panel fixed-effects estimates show that ineffective redistribution is related to higher state-level poverty rates, lower employment-to-population ratios, and lower levels of overall employment.

Suggested Citation

  • Luke Petach, 2022. "A Tullock Index for assessing the effectiveness of redistribution," Public Choice, Springer, vol. 191(1), pages 137-159, April.
    • Handle: RePEc:kap:pubcho:v:191:y:2022:i:1:d:10.1007_s11127-022-00957-7
    DOI: 10.1007/s11127-022-00957-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11127-022-00957-7
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-022-00957-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stephen A. Marglin, 1963. "The Social Rate of Discount and The Optimal Rate of Investment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 77(1), pages 95-111.
    2. James M. Buchanan, 1976. "A Hobbesian Interpretation Of The Rawlsian Difference Principle," Kyklos, Wiley Blackwell, vol. 29(1), pages 5-25, January.
    3. Milton Friedman, 1947. "Lerner on the Economics of Control," Journal of Political Economy, University of Chicago Press, vol. 55, pages 405-405.
    4. Colin Gray & Adam Leive & Elena Prager & Kelsey B. Pukelis & Mary Zaki, 2021. "Employed in a SNAP? The Impact of Work Requirements on Program Participation and Labor Supply," NBER Working Papers 28877, National Bureau of Economic Research, Inc.
    5. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922.
    6. Powers, Elizabeth T., 1998. "Does means-testing welfare discourage saving? evidence from a change in AFDC policy in the United States," Journal of Public Economics, Elsevier, vol. 68(1), pages 33-53, April.
    7. Hendrickson, Joshua R. & Salter, Alexander William & Albrecht, Brian C., 2018. "Preventing plunder: Military technology, capital accumulation, and economic growth," Journal of Macroeconomics, Elsevier, vol. 58(C), pages 154-173.
    8. Daniele Tavani & Luke Petach, 2021. "Firm beliefs and long-run demand effects in a labor-constrained model of growth and distribution," Journal of Evolutionary Economics, Springer, vol. 31(2), pages 353-377, April.
    9. Petach, Luke & Tavani, Daniele, 2019. "No one is alone: Strategic complementarities, capacity utilization, growth, and distribution," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 203-215.
    10. Joachim Wessels, 1993. "Redistribution from a constitutional perspective," Constitutional Political Economy, Springer, vol. 4(3), pages 425-448, September.
    11. Daniel K. Fetter & Lee M. Lockwood, 2018. "Government Old-Age Support and Labor Supply: Evidence from the Old Age Assistance Program," American Economic Review, American Economic Association, vol. 108(8), pages 2174-2211, August.
    12. Thompson, Earl A, 1974. "Taxation and National Defense," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 755-782, July/Aug..
    13. Petach, Luke & Tavani, Daniele, 2022. "Aggregate demand externalities, income distribution, and wealth inequality," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 433-446.
    14. David H. Autor & Mark G. Duggan, 2007. "Distinguishing Income from Substitution Effects in Disability Insurance," American Economic Review, American Economic Association, vol. 97(2), pages 119-124, May.
    15. Gordon Tullock, 1959. "Problems of Majority Voting," Journal of Political Economy, University of Chicago Press, vol. 67, pages 571-571.
    16. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    17. Garrett Borawski & Mark E. Schweitzer, 2021. "How Well Did PPP Loans Reach Low- and Moderate-Income Communities?," Economic Commentary, Federal Reserve Bank of Cleveland, vol. 2021(13), pages 1-5, May.
    18. Hochman, Harold M & Rodgers, James D, 1969. "Pareto Optimal Redistribution," American Economic Review, American Economic Association, vol. 59(4), pages 542-557, Part I Se.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manuel David Cruz & Daniele Tavani, 2022. "Secular Stagnation: A Classical-Marxian View," Working Papers PKWP2229, Post Keynesian Economics Society (PKES).
    2. Randall G. Holcombe, 2020. "James M. Buchanan’s constitutional project: past and future," Public Choice, Springer, vol. 183(3), pages 371-387, June.
    3. Whitney Buser, 2011. "The impact of fiscal decentralization on economics performance in high-income OECD nations: an institutional approach," Public Choice, Springer, vol. 149(1), pages 31-48, October.
    4. Christian Bjørnskov & Axel Dreher & Justina Fischer, 2008. "Cross-country determinants of life satisfaction: exploring different determinants across groups in society," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(1), pages 119-173, January.
    5. Arye L. Hillman & Heinrich W. Ursprung, 2016. "Where are the rent seekers?," Constitutional Political Economy, Springer, vol. 27(2), pages 124-141, June.
    6. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    7. Roger Congleton, 2014. "The contractarian constitutional political economy of James Buchanan," Constitutional Political Economy, Springer, vol. 25(1), pages 39-67, March.
    8. Petach, Luke & Tavani, Daniele, 2022. "Aggregate demand externalities, income distribution, and wealth inequality," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 433-446.
    9. Ariel Herbert Fambeu & Georges Dieudonné Mbondo & Patricia Tchawa Yomi, 2022. "Bigger or better? The effect of public spending on happiness in Africa," African Development Review, African Development Bank, vol. 34(4), pages 487-499, December.
    10. Traub, Stefan & Seidl, Christian & Schmidt, Ulrich, 2003. "Lorenz, Pareto, Pigou: Who Scores Best? Experimental Evidence on Dominance Relations of Income Distributions," Economics Working Papers 2003-04, Christian-Albrechts-University of Kiel, Department of Economics.
    11. Dennis Mueller, 2012. "James Buchanan, Gordon Tullock, and The Calculus," Public Choice, Springer, vol. 152(3), pages 329-332, September.
    12. Feld, Lars P, 2000. "Tax Competition and Income Redistribution: An Empirical Analysis for Switzerland," Public Choice, Springer, vol. 105(1-2), pages 125-164, October.
    13. Morgan Reynolds & Eugene Smolensky, 1977. "Post-Fisc Distributions of Income in 1950, 1961, and 1970," Public Finance Review, , vol. 5(4), pages 419-438, October.
    14. Brian C. Albrecht & Joshua R. Hendrickson & Alexander William Salter, 2022. "Evolution, uncertainty, and the asymptotic efficiency of policy," Public Choice, Springer, vol. 192(1), pages 169-188, July.
    15. Christian Bjørnskov & Axel Dreher & Justina Fischer, 2007. "The bigger the better? Evidence of the effect of government size on life satisfaction around the world," Public Choice, Springer, vol. 130(3), pages 267-292, March.
    16. Andrew Abbott & Philip Jones, 2013. "Procyclical government spending: a public choice analysis," Public Choice, Springer, vol. 154(3), pages 243-258, March.
    17. Hamlin, Alan & Jennings, Colin, 2011. "Expressive Political Behaviour: Foundations, Scope and Implications," British Journal of Political Science, Cambridge University Press, vol. 41(3), pages 645-670, July.
    18. Thomas A. Garrett & Russell M. Rhine, 2006. "On the size and growth of government," Review, Federal Reserve Bank of St. Louis, vol. 88(Jan), pages 13-30.
    19. Barr, Nicholas, 1992. "Economic theory and the welfare state : a survey and interpretation," LSE Research Online Documents on Economics 279, London School of Economics and Political Science, LSE Library.
    20. Charles Rowley, 2012. "The intellectual legacy of Gordon Tullock," Public Choice, Springer, vol. 152(1), pages 29-46, July.

    More about this item

    Keywords

    Inequality; Gordon Tullock; Public choice; Redistribution;
    All these keywords.

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:191:y:2022:i:1:d:10.1007_s11127-022-00957-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.