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The Impact of a Marginal Subsidy on Gini Indices

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  • Alejandro Corvalan

Abstract

type="main"> This paper addresses the impact of a subsidy—an increase in someone's income—on generalized Gini inequality indices. We show that for any distribution of income there exists a “pivotal individual” such that an increment given to an individual poorer (resp. richer) than himself, decreases (resp. increases) inequality. We characterize the pivotal individual for relative and absolute Gini indices. We show that normative prescriptions about the preferred level of inequality aversion can also be formulated in terms of the pivotal, namely the richest individual that we find just to compensate.

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  • Alejandro Corvalan, 2014. "The Impact of a Marginal Subsidy on Gini Indices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 596-603, September.
    • Handle: RePEc:bla:revinw:v:60:y:2014:i:3:p:596-603
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    File URL: http://hdl.handle.net/10.1111/roiw.12010
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    References listed on IDEAS

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    Cited by:

    1. Laurence S J Roope, 2021. "First estimates of inequality benchmark incomes for a range of countries," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-8, March.
    2. Pantelis Kammas & Vassilis Sarantides, 2016. "Fiscal redistribution around elections when democracy is not “the only game in town”," Public Choice, Springer, vol. 168(3), pages 279-311, September.
    3. Creedy, John, 2021. "Comparing Income Distributions Using Atkinson’s Measure of Inequality," Working Paper Series 9469, Victoria University of Wellington, Chair in Public Finance.
    4. Laurence S. J. Roope, 2019. "Characterizing inequality benchmark incomes," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(1), pages 131-145, May.
    5. John Creedy, 2016. "Interpreting inequality measures and changes in inequality," New Zealand Economic Papers, Taylor & Francis Journals, vol. 50(2), pages 177-192, August.
    6. John Creedy, 2023. "Comparing Income Distributions Using Atkinson's Measure of Inequality," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 56(1), pages 141-155, March.
    7. Pablo Gutiérrez Cubillos, 2022. "Gini and undercoverage at the upper tail: a simple approximation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(2), pages 443-471, April.

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