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Lorenz dominance and non-welfaristic redistribution

Author

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  • LUTTENS, Roland Iwan
  • VAN DE GAER, Dirk

Abstract

Given the decision to implement a non-welfaristic redistribution scheme, we analyze which mechanisms are favored by traditional Lorenz dominance and poverty dominance adherents. We show that for large classes of income functions Lorenz dominance results can be found in the comparison of two egalitarian equivalent mechanisms. Comparisons of different conditionally egalitarian mechanisms only yield poverty dominance results. Finally, certain egalitarian equivalent mechanisms can Lorenz dominate all conditionally egalitarian mechanisms. Our analysis stresses the need for accurate empirical estimates of the pre-tax income function and of the distributions of responsibility and compensation characteristics.
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Suggested Citation

  • LUTTENS, Roland Iwan & VAN DE GAER, Dirk, 2007. "Lorenz dominance and non-welfaristic redistribution," LIDAM Reprints CORE 1950, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1950
    DOI: 10.1007/s00355-006-0164-5
    Note: In : Social Choice Welfare, 28, 281-302, 2007
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    Cited by:

    1. Dirk Van de gaer & Xavier Ramos, 2020. "Measurement of inequality of opportunity based on counterfactuals," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(3), pages 595-627, October.
    2. Fleurbaey, Marc & Schokkaert, Erik, 2009. "Unfair inequalities in health and health care," Journal of Health Economics, Elsevier, vol. 28(1), pages 73-90, January.
    3. Xavier Ramos & Dirk Van de gaer, 2012. "Empirical approaches to inequality of opportunity: Principles, measures, and evidence," Working Papers 259, ECINEQ, Society for the Study of Economic Inequality.
    4. Schokkaert, Erik & Van de Voorde, Carine, 2009. "Direct versus indirect standardization in risk adjustment," Journal of Health Economics, Elsevier, vol. 28(2), pages 361-374, March.

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