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Lorenz Dominance and Non-welfaristic Redistribution

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  • Roland Luttens

    ()

  • Dirk gaer

    ()

Abstract

Given the decision to implement a non-welfaristic redistribution scheme, we analyze which mechanisms are favored by traditional Lorenz dominance and poverty dominance adherents. We show that for large classes of income functions Lorenz dominance results can be found in the comparison of two egalitarian equivalent mechanisms. Comparisons of different conditionally egalitarian mechanisms only yield poverty dominance results. Finally, certain egalitarian equivalent mechanisms can Lorenz dominate all conditionally egalitarian mechanisms. Our analysis stresses the need for accurate empirical estimates of the pre-tax income function and of the distributions of responsibility and compensation characteristics.

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File URL: http://hdl.handle.net/10.1007/s00355-006-0164-5
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Bibliographic Info

Article provided by Springer in its journal Social Choice and Welfare.

Volume (Year): 28 (2007)
Issue (Month): 2 (February)
Pages: 281-302

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Handle: RePEc:spr:sochwe:v:28:y:2007:i:2:p:281-302

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References

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  1. Bossert, Walter, 1995. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 29(1), pages 1-17, February.
  2. Schokkaert, Erik & Van de gaer, Dirk & Vandenbroucke, Frank & Luttens, Roland Iwan, 2004. "Responsibility sensitive egalitarianism and optimal linear income taxation," Mathematical Social Sciences, Elsevier, vol. 48(2), pages 151-182, September.
  3. Dirk Van de gaer & Marc Fleurbaey & Walter Bossert, 1999. "Responsibility, talent, and compensation: A second-best analysis," Review of Economic Design, Springer, vol. 4(1), pages 35-55.
  4. Elisha A. Pazner & David Schmeidler, 1975. "Egalitarian Equivalent Allocations: A New Concept of Economic Equity," Discussion Papers 174, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Shorrocks, Anthony F & Foster, James E, 1987. "Transfer Sensitive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 485-97, July.
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Cited by:
  1. SCHOKKAERT, Erik & VAN DE VOORDE, Carine, . "Direct versus indirect standardization in risk adjustment," CORE Discussion Papers RP -2139, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. X. Ramos & D. Van De Gaer, 2012. "Empirical Approaches to Inequality of Opportunity: Principles, Measures, and Evidence," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/792, Ghent University, Faculty of Economics and Business Administration.
  3. Fleurbaey, Marc & Schokkaert, Erik, 2009. "Unfair inequalities in health and health care," Journal of Health Economics, Elsevier, vol. 28(1), pages 73-90, January.

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