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Inequality, Welfare and Monotonicity

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  • Yoram Amiel
  • Frank A Cowell

Abstract

We establish a general relationship between the standard form of the individualistic social-welfare function and the ?reduced-form? version that is expressed in terms of inequality and mean income. This shows the relationship between the property of monotonicity and the slope of the equity-efficiency trade-off. Particularly simple results are available for a large class of inequality measures that includes the Gini. These results do not require differentiability of the social welfare function.

Suggested Citation

  • Yoram Amiel & Frank A Cowell, 1997. "Inequality, Welfare and Monotonicity," STICERD - Distributional Analysis Research Programme Papers 29, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  • Handle: RePEc:cep:stidar:29
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    References listed on IDEAS

    as
    1. Chipman, John S., 1974. "The welfare ranking of Pareto distributions," Journal of Economic Theory, Elsevier, vol. 9(3), pages 275-282, November.
    2. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
    3. Amiel, Yoram & Cowell, Frank, 1994. "Monotonicity, dominance and the Pareto principle," Economics Letters, Elsevier, vol. 45(4), pages 447-450, August.
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    More about this item

    Keywords

    Inequality; social welfare monotonicity;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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