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A non-parametric decomposition of redistribution into vertical and horizontal components

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  • Irene Perrote

    (Universidad Europea de Madrid)

  • Juan Gabriel Rodríguez

    (Universidad Rey Juan Carlos)

  • Rafael Salas

    ()
    (Universidad Complutense de Madrid)

Abstract

We use non-parametric methods to propose horizontal inequity (HI) measures that satisfy certain normative and statistical properties. The HI measures tackle the problem of arbitrary definition of similar individuals and satisfy the horizontal transfer principle. HI is measured by any index consistent with the distance between the estimated and actual post-tax income Lorenz curves. This incorporates an ordinal view of HI. The total effect of a tax system can be decomposed into welfare gain due to income redistribution free of HI and welfare loss due to HI. Other indices in the literature can be seen as particular cases.

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Bibliographic Info

Paper provided by Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales in its series Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales with number 01-07.

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Date of creation: 2001
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Handle: RePEc:ucm:doctra:01-07

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Cited by:
  1. César Octavio Vargas Téllez, 2009. "Veinte años de estancamiento en la distribución del ingreso de las familias Mexicanas. Un enfoque de microdatos," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 81-107, May.

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