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Kakwani decomposition of redistributive effect: Origins, critics and upgrades

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  • Ivica Urban

    ()
    (Institute of Public Finance, Zagreb)

Abstract

Kakwani decomposition of redistributive effect into vertical and reranking terms is one of the most widely used tools in measurement of income redistribution. This paper describes how the decomposition has emerged, how its proponents managed to expand and upgrade it, and how extensively it has been employed in empirical research. However, the arguments are presented that the decomposition features certain methodological problems and it is therefore called for its reinterpretation.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2009-148.pdf
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Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 148.

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Length: 35 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2009-148

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Keywords: income redistribution; Kakwani decomposition; reranking; horizontal inequity; progressivity;

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Citations

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Cited by:
  1. Carlos Farinha Rodrigues & Isabel Andrade, 2013. "Robin Hood versus Piggy Bank: Income redistribution in Portugal 2006-10," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2013/28, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  2. Nora Lustig & Sean Higgins, 2012. "Commitment to Equity Assessment (CEQ): Estimating the Incidence of Social Spending, Subsidies and Taxes Handbook," Working Papers, Tulane University, Department of Economics 1219, Tulane University, Department of Economics.
  3. Nora Lustig, 2011. "Commitment to Equity Assessment (CEQ): A Diagnostic Framework to Assess Governments' Fiscal Policies Handbook," Working Papers, Tulane University, Department of Economics 1122, Tulane University, Department of Economics.
  4. Ivica Urban, 2010. "Decomposing Redistributive and Reranking Effects to Reveal Contributions of Taxes and Benefits," wiiw Balkan Observatory Working Papers, The Vienna Institute for International Economic Studies, wiiw 85, The Vienna Institute for International Economic Studies, wiiw.
  5. Flores Unzaga, Ismael Martin & Zhu, Junyi, 2014. "Bracket Creep Revisited: Progressivity and a Solution by Adjusting the Rich Tax in Germany," EconStor Preprints 100006, ZBW - German National Library of Economics.
  6. Ivica Urban, 2009. "Indices of redistributive effect and reranking: reinterpretation," Working Papers 147, ECINEQ, Society for the Study of Economic Inequality.
  7. Flores Unzaga, Ismael Martin & Zhu, Junyi, 2014. "Bracket Creep Revisited: Progressivity and a Solution by Adjusting the Rich Tax in Germany," MPRA Paper 57664, University Library of Munich, Germany.
  8. Nicolas Herault & Francisco Azpitarte, 2014. "Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Transfer System Account for the Decline in Redistribution?," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2014n02, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  9. Nicolas Herault & Francisco Azpitarte, 2013. "Understanding Changes in Progressivity and Redistributive Effects: The Role of Tax-Transfer Policies and Labour Supply Decisions," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2013n33, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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