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Horizontal inequity comparisons

Author

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  • Valentino Dardanoni

    () (Università di Palermo, 90128 Palermo, Italy)

  • Peter Lambert

    () (University of York, Department of Economics, York, Y01 5DD, UK)

Abstract

In this paper, we expound the idea that horizontal inequity (HI) in different tax systems be compared by transplanting the HI from one tax system into the other, as a mapping between its pre- and post-tax living standard distributions, and then applying known results to compare the extent of association present in the two joint distributions. We make this idea operational by means of axioms which, we show, lead to an implementable procedure based on the `copula'. Statistical inference procedures are discussed, and illustrative empirical exercises are undertaken for the UK, Canadian and Israeli tax and benefit systems.

Suggested Citation

  • Valentino Dardanoni & Peter Lambert, 2001. "Horizontal inequity comparisons," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 799-816.
  • Handle: RePEc:spr:sochwe:v:18:y:2001:i:4:p:799-816
    Note: Received: 1 March 1999/Accepted: 29 May 2000
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    Cited by:

    1. Murat GENÇ & Murray SMITH, "undated". "Wage Gaps in the New Zealand Labour Market," EcoMod2008 23800042, EcoMod.
    2. Ivica Urban, 2014. "Contributions of taxes and benefits to vertical and horizontal effects," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(3), pages 619-645, March.
    3. Koen Decancq, 2014. "Copula-based measurement of dependence between dimensions of well-being," Oxford Economic Papers, Oxford University Press, vol. 66(3), pages 681-701.
    4. Murray D Smith, 2004. "Stochastic Frontier Models With Correlated Error Components," Econometric Society 2004 Australasian Meetings 121, Econometric Society.
    5. Aaberge, Rolf & Atkinson, Anthony B. & Königs, Sebastian, 2018. "From Classes to Copulas: Wages, Capital, and Top Incomes," IZA Discussion Papers 11522, Institute for the Study of Labor (IZA).
    6. Harvey, James, 2005. "A note on the 'natural rate of subjective inequality' hypothesis and the approximate relationship between the Gini coefficient and the Atkinson index," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1021-1025, June.
    7. Valentino Dardoni & Peter Lambert,, 2000. "Progressivity comparisons," IFS Working Papers W00/18, Institute for Fiscal Studies.
    8. Ivica Urban, 2009. "Kakwani decomposition of redistributive effect: Origins, critics and upgrades," Working Papers 148, ECINEQ, Society for the Study of Economic Inequality.
    9. Diana, Tony, 2011. "Improving schedule reliability based on copulas: An application to five of the most congested US airports," Journal of Air Transport Management, Elsevier, vol. 17(5), pages 284-287.
    10. Ivica Urban, 2013. "Implementation Issues in the Duclos–Jalbert–Araar Decomposition of Redistributive Effect," Public Finance Review, , vol. 41(1), pages 121-143, January.
    11. Sergio Rey, 2014. "Fast algorithms for a space-time concordance measure," Computational Statistics, Springer, vol. 29(3), pages 799-811, June.
    12. Duclos, Jean-Yves & Jalbert, Vincent & Araar, Abdelkrim, 2003. "Classical Horizontal Inequity and Reranking: an Integrating Approach," Cahiers de recherche 0306, CIRPEE.
    13. Lambert Peter J. & Thoresen Thor O., 2012. "The Inequality Effects of a Dual Income Tax System," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-17, July.
    14. Peter Lambert & Thor Thoresen, 2009. "Base independence in the analysis of tax policy effects: with an application to Norway 1992–2004," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(2), pages 219-252, April.
    15. Maria Giovanna Monti & Simone Pellegrino & Achille Vernizzi, 2015. "On Measuring Inequity in Taxation Among Groups of Income Units," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(1), pages 43-58, March.
    16. James Harvey, "undated". "A note on the 'Natural Rate of Subjective Inequality' hypothesis and the approximate relationship between the Gini coefficient and the Atkinson index," Discussion Papers 03/12, Department of Economics, University of York.
    17. Dardanoni, Valentino & Lambert, Peter J., 2002. "Progressivity comparisons," Journal of Public Economics, Elsevier, vol. 86(1), pages 99-122, October.
    18. Erlend Bø & Peter Lambert & Thor Thoresen, 2012. "Horizontal inequity under a dual income tax system: principles and measurement," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(5), pages 625-640, October.
    19. Casey Quinn, 2005. "Generalisable regression methods for costeffectiveness using copulas," Health, Econometrics and Data Group (HEDG) Working Papers 05/13, HEDG, c/o Department of Economics, University of York.

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