IDEAS home Printed from https://ideas.repec.org/p/grt/wpegrt/2017-15.html
   My bibliography  Save this paper

The Impact of Talents and Preferences on Income Inequality

Author

Listed:
  • Udo EBERT
  • Patrick MOYES

Abstract

Different trends in the distribution of income across countries and in the same country over time are typically observed. The general question we are interested in is to know where these inequalities come from and what explains their differences. By restricting our attention to an artisan economy with no taxation and where individuals have identical preferences but different productivities, we study the impact on the inequality of labour income of particular changes in the way productivities are allocated. Then, assuming that the distribution of productivities is fixed, we look for the modifications of the preferences that lead to a more even distribution of income. Finally, we examine the question of how simultaneous changes in preferences and in the distribution of productivities interact in shaping the distribution of labour income.

Suggested Citation

  • Udo EBERT & Patrick MOYES, 2017. "The Impact of Talents and Preferences on Income Inequality," Cahiers du GREThA (2007-2019) 2017-15, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2017-15
    as

    Download full text from publisher

    File URL: http://cahiersdugretha.u-bordeaux.fr/2017/2017-15.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Moyes, Patrick, 1987. "A new concept of Lorenz domination," Economics Letters, Elsevier, vol. 23(2), pages 203-207.
    2. Udo Ebert & Patrick Moyes, 2007. "Income Taxation with Labor Responses," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(4), pages 653-682, August.
    3. Bossert, Walter & Pfingsten, Andreas, 1990. "Intermediate inequality: concepts, indices, and welfare implications," Mathematical Social Sciences, Elsevier, vol. 19(2), pages 117-134, April.
    4. Kevin A. Bryan & Leonardo Martinez, 2008. "On the evolution of income inequality in the United States," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 94(Spr), pages 97-120.
    5. Le Breton, Michel & Moyes, Patrick & Trannoy, Alain, 1996. "Inequality Reducing Properties of Composite Taxation," Journal of Economic Theory, Elsevier, vol. 69(1), pages 71-103, April.
    6. Kolm, Serge-Christophe, 1976. "Unequal inequalities. I," Journal of Economic Theory, Elsevier, vol. 12(3), pages 416-442, June.
    7. Brian McCaig & Adonis Yatchew, 2007. "International welfare comparisons and nonparametric testing of multivariate stochastic dominance," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(5), pages 951-969.
    8. James E. Foster & Efe A. Ok, 1999. "Lorenz Dominance and the Variance of Logarithms," Econometrica, Econometric Society, vol. 67(4), pages 901-908, July.
    9. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975, Decembrie.
    10. Myles,Gareth D., 1995. "Public Economics," Cambridge Books, Cambridge University Press, number 9780521497695.
    11. Fleurbaey, Marc & Michel, Philippe, 2001. "Transfer principles and inequality aversion, with an application to optimal growth," Mathematical Social Sciences, Elsevier, vol. 42(1), pages 1-11, July.
    12. Eeckhoudt, Louis & Gollier, Christian & Schlesinger, Harris, 1996. "Changes in Background Risk and Risk-Taking Behavior," Econometrica, Econometric Society, vol. 64(3), pages 683-689, May.
    13. A. B. Atkinson & F. Bourguignon, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(2), pages 183-201.
    14. Shorrocks, Anthony F, 1983. "Ranking Income Distributions," Economica, London School of Economics and Political Science, vol. 50(197), pages 3-17, February.
    15. Coral del RÎo & Javier Ruiz-Castillo, 2000. "Intermediate inequality and welfare," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(2), pages 223-239.
    16. Salverda, Wiemer & Nolan, Brian & Smeeding, Timothy M. (ed.), 2011. "The Oxford Handbook of Economic Inequality," OUP Catalogue, Oxford University Press, number 9780199606061, Decembrie.
    17. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    18. Moyes Patrick, 1994. "Inequality Reducing and Inequality Preserving Transformations of Incomes: Symmetric and Individualistic Transformations," Journal of Economic Theory, Elsevier, vol. 63(2), pages 271-298, August.
    19. Jakobsson, Ulf, 1976. "On the measurement of the degree of progression," Journal of Public Economics, Elsevier, vol. 5(1-2), pages 161-168.
    20. Fleurbaey, Marc & Maniquet, François, 2015. "Optimal taxation theory and principles of fairness," LIDAM Discussion Papers CORE 2015005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    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. Udo Ebert & Patrick Moyes, 2018. "Talents, preferences and income inequality," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(1), pages 13-50, June.
    2. Udo Ebert & Patrick Moyes, 2002. "Welfare, inequality and the transformation of incomes the case of weighted income distributions," Journal of Economics, Springer, vol. 9(1), pages 9-50, December.
    3. Chakravarty, Satya R. & Sarkar, Palash, 2022. "A synthesis of local and effective tax progressivity measurement," MPRA Paper 115180, University Library of Munich, Germany.
    4. Satya Chakravarty & Swami Tyagarupananda, 2009. "The subgroup decomposable intermediate indices of inequality," Spanish Economic Review, Springer;Spanish Economic Association, vol. 11(2), pages 83-97, June.
    5. Moyes, Patrick, 2003. "Redistributive effects of minimal equal sacrifice taxation," Journal of Economic Theory, Elsevier, vol. 108(1), pages 111-140, January.
    6. Gravel, Nicolas & Poitevin, Michel, 2006. "The progressivity of equalization payments in federations," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1725-1743, September.
    7. Claudio Zoli, 2018. "A Note on Progressive Taxation and Inequality Equivalence," Research on Economic Inequality, in: Inequality, Taxation and Intergenerational Transmission, volume 26, pages 15-33, Emerald Group Publishing Limited.
    8. Satya R. Chakravarty & Pietro Muliere, 2003. "Welfare indicators: A review and new perspectives. 1. Measurement of inequality," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 457-497.
    9. Alain Chateauneuf & Patrick Moyes, 2002. "Measuring inequality without the Pigou-Dalton condition," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00156475, HAL.
    10. Carbonell-Nicolau, Oriol & Llavador, Humberto, 2018. "Inequality reducing properties of progressive income tax schedules: the case of endogenous income," Theoretical Economics, Econometric Society, vol. 13(1), January.
    11. Cowell, Frank, 2006. "Inequality: measurement," LSE Research Online Documents on Economics 2686, London School of Economics and Political Science, LSE Library.
    12. Marko Ledić & Ivica Rubil & Ivica Urban, 2023. "Tax progressivity and social welfare with a continuum of inequality views," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(5), pages 1266-1296, October.
    13. Nicolas Gravel & Patrick Moyes, 2006. "Ethically Robust Comparisons of Distributions of Two Individual Attributes," IDEP Working Papers 0605, Institut d'economie publique (IDEP), Marseille, France, revised Aug 2006.
    14. Oriol Carbonell-Nicolau & Humberto Llavador, 2021. "Inequality, Bipolarization, and Tax Progressivity," American Economic Journal: Microeconomics, American Economic Association, vol. 13(4), pages 492-513, November.
    15. Ebert, Udo & Moyes, Patrick, 2000. "Consistent Income Tax Structures When Households Are Heterogeneous," Journal of Economic Theory, Elsevier, vol. 90(1), pages 116-150, January.
    16. Claudio Zoli, 2012. "Characterizing Inequality Equivalence Criteria," Working Papers 32/2012, University of Verona, Department of Economics.
    17. Francisco Azpitarte & Olga Alonso-Villar, 2012. "A Dominance Criterion for Measuring Income Inequality from a Centrist View: The Case of Australia," Melbourne Institute Working Paper Series wp2012n03, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    18. Francisco Azpitarte & Olga Alonso-Villar, 2011. "Ray-invariant intermediate inequality measures: A Lorenz dominance criterion," Working Papers 226, ECINEQ, Society for the Study of Economic Inequality.
    19. Patrick Moyes, 2007. "An extended Gini approach to inequality measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(3), pages 279-303, December.
    20. Satya R. Chakravarty, 2009. "Equity and efficiency as components of a social welfare function," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(2), pages 181-199, June.

    More about this item

    Keywords

    Income; Inequality; Productivities; Preferences; Lorenz Dominance.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    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:grt:wpegrt:2017-15. 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: Ernest Miguelez (email available below). General contact details of provider: https://edirc.repec.org/data/ifredfr.html .

    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.