Measuring Progressivity and Inequality
AbstractA general class of progressivity indices is proposed which is consistent with the well-developed theory of the measurement of inequality and social welfare. In particular, we show that the more progressive a tax system, the more equal the distribution of net income and the greater the progressivity index. For an additive social welfare function and a progressive tax system, the greater the degree of relative inequality aversion, the greater the progressivity index. We also discuss the link between inequality of gross income and tax progressivity. A by-product is the derivation of a general class of inequality measures that are invariant to equi-proportionate changes in incomes. We illustrate the analysis using the British tax and benefit system.
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Bibliographic InfoPaper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 9525.
Date of creation: 1995
Date of revision:
Progressivity; redistribution; inequality; social welfare;
Other versions of this item:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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- Duclos, J.Y. & Jalbert, V. & Araar, A., 2000.
"Classical Horizontal Inequity and Reranking: an Integrated Approach,"
0002, Laval - Recherche en Politique Economique.
- Duclos, Jean-Yves & Jalbert, Vincent & Araar, Abdelkrim, 2000. "Classical Horizontal Inequity and Reranking: an Integrated Approach," Cahiers de recherche 0002, Université Laval - Département d'économique.
- Jean-Yves Duclos & Vincent Jalbert & Abdelkrim Araar, 2001. "Classical Horizontal Inequity and Reranking: an Integrated Approach," UFAE and IAE Working Papers 478.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Duclos, Jean-Yves & Jalbert, Vincent & Araar, Abdelkrim, 2003. "Classical Horizontal Inequity and Reranking: an Integrating Approach," Cahiers de recherche 0306, CIRPEE.
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