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Deprivation, Inequality And Welfare

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  • SATYA R. CHAKRAVARTY

Abstract

Welfare ranking of income distributions involves a trade‐off between equity and efficiency. A person's feeling of deprivation about higher incomes may be of a relative or absolute type. We consider an intermediate notion of deprivation, a convex mix of relative and absolute deprivations. We then look at the problem of welfare ranking of income distributions when welfare increases under a globally equitable redistribution and under an income increase that keeps intermediate deprivation fixed. All deprivation indices can be regarded as inequality indices but the converse is not true. We also provide a numerical illustration of our results.

Suggested Citation

  • Satya R. Chakravarty, 2009. "Deprivation, Inequality And Welfare," The Japanese Economic Review, Japanese Economic Association, vol. 60(2), pages 172-190, June.
    • Handle: RePEc:bla:jecrev:v:60:y:2009:i:2:p:172-190
    DOI: 10.1111/j.1468-5876.2008.00430.x
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    References listed on IDEAS

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