Does Less Inequality among Households Mean Less Inequality among Individuals?
AbstractConsider an income distribution among households of the same size in which individuals, equally needy from the point of view of an ethical observer, are treated unfairly. Individuals are split into two types, the dominant and the dominated. We look for conditions under which welfare and inequality quasi-orders established at the household level still hold at the individual one. A necessary and sufficient condition for the Generalized Lorenz test is that the income of dominated individuals is a concave function of the household income: individuals of poor households have to stand more together than individuals of rich households. This property also proves to be crucial for the preservation of the Relative and Absolute Lorenz criteria, when the more egalitarian distribution is the poorest. Extensions to individuals heterogeneous in needs and more than two types are also provided.
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Bibliographic InfoPaper provided by Institut d'economie publique (IDEP), Marseille, France in its series IDEP Working Papers with number 0407.
Length: 35 pages
Date of creation: Apr 2004
Date of revision: Jun 2004
Lorenz dominance; Intra-household inequality; concavity; sharing rule.;
Other versions of this item:
- Peluso, Eugenio & Trannoy, Alain, 2007. "Does less inequality among households mean less inequality among individuals?," Journal of Economic Theory, Elsevier, vol. 133(1), pages 568-578, March.
- Eugenio Peluso & Alain Trannoy, 2004. "Does less inequality among households mean less inequality among individuals ?," THEMA Working Papers 2004-11, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Eugenio Peluso & Alain Trannoy, 2004. "Does less inequality among households mean less inequality among individuals?," Department of Economics University of Siena 432, Department of Economics, University of Siena.
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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