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Private and Pareto Efficient Public Transfers


  • Ikuho Kochi

    () (Professor, Instituto de Ciencias Sociales y Administración, Universidad Autónoma de Ciudad Juárez. Ciudad Juárez, Chih. Mexico.)

  • Raúl Alberto Ponce Rodríguez

    () (Professor, Instituto de Ciencias Sociales y Administración, Universidad Autónoma de Ciudad Juárez. Ciudad Juárez, Chih. Mexico.)


Private transfers are a market mechanism that changes the inequality in the distribution of income. Should the government increase or reduce the size of Pareto efficient public transfers after observing an increase in inter vivos private transfers that reduces (increases) inequality in the distribution of income? In this paper we provide an answer to this question. Our analysis identifies conditions in which private transfers change income inequality and crowd out government’s transfers in a targeted redistributive program, but increase the size of public transfers in a broad base redistributive program.

Suggested Citation

  • Ikuho Kochi & Raúl Alberto Ponce Rodríguez, 2011. "Private and Pareto Efficient Public Transfers," Economía Mexicana NUEVA ÉPOCA, , vol. 0(2), pages 379-405, July-Dece.
  • Handle: RePEc:emc:ecomex:v:20:y:2011:i:2:p:379-405

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    Cited by:

    1. Ikuho Kochi & Ra¨²l Alberto Ponce Rodr¨ªguez, 2016. "International Private Transfers and Optimal Tax Structure in Developing Economies," Review of Economics & Finance, Better Advances Press, Canada, vol. 6, pages 13-26, February.

    More about this item


    redistribution; optimal taxation; personal income taxes; performance of government; remittances.;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances


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