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The Principle of Strong Kiminishing Transfer

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  • Chateauneuf, A.
  • Gajdos, T.
  • Wilthien, P.-H.

Abstract

In a seminal paper, Kolm [14] introduces the principle diminishing transfer. This principle requires that a transfert from an individual with income x to one with income x - D(D > 0) has a greater impact on social welfare the lower x is. On the other hand Mehran [15] and Kakwani [11] introduced another principle, namely the principle of dual diminishing transfer, which states that a transfer from an individual with rank i to one with rank (i - p) has a greater impact the lower i is. We give here necessary and sufficient conditions for a decision maker who behaves in accordance with dual Yaari's model to respect the principle of dual diminishing transfer. Unfortunately, it appears that if a decision maker who behaves in accordance with the RDEU model respects the principle of diminishing transfer, then he behaves in accordance with the EU model.

Suggested Citation

  • Chateauneuf, A. & Gajdos, T. & Wilthien, P.-H., 1999. "The Principle of Strong Kiminishing Transfer," Papiers d'Economie Mathématique et Applications 1999-96, Université Panthéon-Sorbonne (Paris 1).
  • Handle: RePEc:fth:pariem:1999-96
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    References listed on IDEAS

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    1. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    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. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January.
    4. Davies James & Hoy Michael, 1994. "The Normative Significance of Using Third-Degree Stochastic Dominance in Comparing Income Distributions," Journal of Economic Theory, Elsevier, vol. 64(2), pages 520-530, December.
    5. Kolm, Serge-Christophe, 1976. "Unequal inequalities. II," Journal of Economic Theory, Elsevier, vol. 13(1), pages 82-111, August.
    6. Claudio Zoli, 1999. "Intersecting generalized Lorenz curves and the Gini index," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(2), pages 183-196.
    7. Bossert, Walter, 1990. "An axiomatization of the single-series Ginis," Journal of Economic Theory, Elsevier, vol. 50(1), pages 82-92, February.
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    Cited by:

    1. Stefananescu, Stefan, 2008. "Measuring the Socio-Economic Bipolarization Phenomenon," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(1), pages 149-161, March.
    2. Mornet, Pauline & Zoli, Claudio & Mussard, Stéphane & Sadefo-Kamdem, Jules & Seyte, Françoise & Terraza, Michel, 2013. "The (α, β)-multi-level α-Gini decomposition with an illustration to income inequality in France in 2005," Economic Modelling, Elsevier, vol. 35(C), pages 944-963.
    3. Mussard, Stéphane, 2007. "La décomposition des mesures d’inégalité en sources de revenu : méthodes et applications," L'Actualité Economique, Société Canadienne de Science Economique, vol. 83(3), pages 415-445, septembre.
    4. Rolf Aaberge, 2009. "Ranking intersecting Lorenz curves," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(2), pages 235-259, August.
    5. 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.
    6. Claudio Zoli, 2002. "Inverse stochastic dominance, inequality measurement and Gini indices," Journal of Economics, Springer, vol. 77(1), pages 119-161, December.
    7. Uberti, Pierpaolo & Figini, Silvia, 2010. "How to measure single-name credit risk concentrations," European Journal of Operational Research, Elsevier, vol. 202(1), pages 232-238, April.
    8. Paul Makdissi & Stéphane Mussard, 2008. "Analyzing the impact of indirect tax reforms on rank-dependent social welfare functions: a positional dominance approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(3), pages 385-399, April.
    9. Peter Lambert, & Giuseppe Lanza, 2003. "The effect on inequality of changing one or two incomes," IFS Working Papers W03/15, Institute for Fiscal Studies.
    10. Bosmans, Kristof, 2007. "Income inequality, quasi-concavity, and gradual population shifts," Mathematical Social Sciences, Elsevier, vol. 53(1), pages 29-45, January.
    11. Fabio Maccheroni & Pietro Muliere & Claudio Zoli, 2005. "Inverse stochastic orders and generalized Gini functionals," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 529-559.
    12. Peter Lambert & Giuseppe Lanza, 2006. "The effect on inequality of changing one or two incomes," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(3), pages 253-277, December.
    13. Louis R. Eeckhoudt & Roger J. A. Laeven & Harris Schlesinger, 2017. "Risk Apportionment: The Dual Story," Papers 1712.02182, arXiv.org.
    14. Stéphane Mussard, 2007. "Between-Group Pigou Dalton Transfers," Cahiers de recherche 07-06, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    15. Wakker, Peter P., 2005. "Decision-foundations for properties of nonadditive measures: general state spaces or general outcome spaces," Games and Economic Behavior, Elsevier, vol. 50(1), pages 107-125, January.
    16. Michel Le Breton & Eugenio Peluso, 2009. "Third-degree stochastic dominance and inequality measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(3), pages 249-268, September.

    More about this item

    Keywords

    INCOME ; DISTRIBUTION ; EQUITY ; RISK;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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