IDEAS home Printed from https://ideas.repec.org/p/hhs/lunewp/2019_007.html
   My bibliography  Save this paper

What Kind of Inequality Do You Prefer? Evaluating Measures of Income and Health Inequality Using Choice Experiments

Author

Listed:

Abstract

When measuring inequality using conventional inequality measures, ethical assumptions about distributional preferences are often implicitly made. In this paper, we ask whether the ethical assumptions underlying the concentration index for income-related inequality in health and the Gini index for income inequality are supported in a representative sample of the Swedish population using an internet-based survey. We find that the median subject has preferences regarding income-related inequality in health that are in line with the ethical assumptions implied by the concentration index, but put higher weight on the poor than what is implied by the Gini index of income inequality. We find that women and individuals with a poorer health status put higher weight on the poor than men and healthier individuals. Ethically flexible inequality measures, such as the s-Gini index and the extended concentration index, imply that researchers have to choose from a toolbox of infinitely many inequality indices. The results of this paper are indicative of which indices (i.e. which parameter values) reflect the views of the population regarding how inequality should be defined.

Suggested Citation

  • Hardardottir, Hjördis & Gerdtham, Ulf-G. & Wengström, Erik, 2019. "What Kind of Inequality Do You Prefer? Evaluating Measures of Income and Health Inequality Using Choice Experiments," Working Papers 2019:7, Lund University, Department of Economics, revised 31 May 2019.
  • Handle: RePEc:hhs:lunewp:2019_007
    as

    Download full text from publisher

    File URL: https://project.nek.lu.se/publications/workpap/papers/wp19_7.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Corneo, Giacomo & Fong, Christina M., 2008. "What's the monetary value of distributive justice," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 289-308, February.
    2. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 133(4), pages 1645-1692.
    3. Wagstaff, Adam, 2002. "Inequality aversion, health inequalities and health achievement," Journal of Health Economics, Elsevier, vol. 21(4), pages 627-641, July.
    4. Wagstaff, Adam, 2009. "Correcting the concentration index: A comment," Journal of Health Economics, Elsevier, vol. 28(2), pages 516-520, March.
    5. 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.
    6. Erreygers, Guido, 2009. "Correcting the Concentration Index: A reply to Wagstaff," Journal of Health Economics, Elsevier, vol. 28(2), pages 521-524, March.
    7. Charles Bellemare & Sabine Kröger & Arthur van Soest, 2008. "Measuring Inequity Aversion in a Heterogeneous Population Using Experimental Decisions and Subjective Probabilities," Econometrica, Econometric Society, vol. 76(4), pages 815-839, July.
    8. Matthew Robson & Miqdad Asaria & Richard Cookson & Aki Tsuchiya & Shehzad Ali, 2017. "Eliciting the Level of Health Inequality Aversion in England," Health Economics, John Wiley & Sons, Ltd., vol. 26(10), pages 1328-1334, October.
    9. Jean-Yves Duclos, 2000. "Gini Indices and the Redistribution of Income," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(2), pages 141-162, March.
    10. Yitzhaki, Shlomo, 1983. "On an Extension of the Gini Inequality Index," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 617-628, October.
    11. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    12. Erreygers, Guido & Clarke, Philip & Van Ourti, Tom, 2012. "“Mirror, mirror, on the wall, who in this land is fairest of all?”—Distributional sensitivity in the measurement of socioeconomic inequality of health," Journal of Health Economics, Elsevier, vol. 31(1), pages 257-270.
    13. Kjellsson, Gustav & Gerdtham, Ulf-G., 2013. "On correcting the concentration index for binary variables," Journal of Health Economics, Elsevier, vol. 32(3), pages 659-670.
    14. Fisman, Raymond & Jakiela, Pamela & Kariv, Shachar, 2017. "Distributional preferences and political behavior," Journal of Public Economics, Elsevier, vol. 155(C), pages 1-10.
    15. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David B. Huffman & Uwe Sunde, 2017. "Global Evidence on Economic Preferences," NBER Working Papers 23943, National Bureau of Economic Research, Inc.
    16. Ana Marta Urrutia Careaga & Francisco José Goerlich Gisbert & Mª Casilda Lasso de la Vega, 2009. "Generalizing the S-Gini Family: Some Properties," Working Papers. Serie AD 2009-16, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    17. Alexander W. Cappelen & Knut Nygaard & Erik Ø. Sørensen & Bertil Tungodden, 2015. "Social Preferences in the Lab: A Comparison of Students and a Representative Population," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(4), pages 1306-1326, October.
    18. Paul Dolan & Aki Tsuchiya, 2011. "Determining the parameters in a social welfare function using stated preference data: an application to health," Applied Economics, Taylor & Francis Journals, vol. 43(18), pages 2241-2250.
    19. Erreygers, Guido, 2009. "Correcting the Concentration Index," Journal of Health Economics, Elsevier, vol. 28(2), pages 504-515, March.
    20. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
    21. Fredrik Carlsson & Dinky Daruvala & Olof Johansson-Stenman, 2005. "Are People Inequality-Averse, or Just Risk-Averse?," Economica, London School of Economics and Political Science, vol. 72(3), pages 375-396, August.
    22. Pickett, Kate E. & Wilkinson, Richard G., 2015. "Income inequality and health: A causal review," Social Science & Medicine, Elsevier, vol. 128(C), pages 316-326.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pol Campos-Mercade & Armando N. Meier & Florian H. Schneider & Erik Wengström, 2020. "Prosociality predicts health behaviors during the COVID-19 pandemic," ECON - Working Papers 346, Department of Economics - University of Zurich.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Allanson & Dennis Petrie, 2013. "On The Choice Of Health Inequality Measure For The Longitudinal Analysis Of Income‐Related Health Inequalities," Health Economics, John Wiley & Sons, Ltd., vol. 22(3), pages 353-365, March.
    2. I. Josa & A. Aguado, 2020. "Measuring Unidimensional Inequality: Practical Framework for the Choice of an Appropriate Measure," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 541-570, June.
    3. Erreygers, Guido & Clarke, Philip & Van Ourti, Tom, 2012. "“Mirror, mirror, on the wall, who in this land is fairest of all?”—Distributional sensitivity in the measurement of socioeconomic inequality of health," Journal of Health Economics, Elsevier, vol. 31(1), pages 257-270.
    4. Paul Allanson & Dennis Petrie, 2014. "Understanding The Vertical Equity Judgements Underpinning Health Inequality Measures," Health Economics, John Wiley & Sons, Ltd., vol. 23(11), pages 1390-1396, November.
    5. Guido Erreygers & Roselinde Kessels & Linkun Chen & Philip Clarke, 2016. "Decomposing Socioeconomic Inequality of Health," EcoMod2016 9574, EcoMod.
    6. Bénédicte H. Apouey & Jacques Silber, 2016. "Performance and Inequality in Health: A Comparison of Child and Maternal Health across Asia," Research on Economic Inequality, in: John A. Bishop & Juan Gabriel Rodríguez (ed.), Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 181-214, Emerald Publishing Ltd.
    7. Erreygers, Guido & Van Ourti, Tom, 2011. "Measuring socioeconomic inequality in health, health care and health financing by means of rank-dependent indices: A recipe for good practice," Journal of Health Economics, Elsevier, vol. 30(4), pages 685-694, July.
    8. Paul Makdissi & Myra Yazbeck, 2017. "Robust rankings of socioeconomic health inequality using a categorical variable," Health Economics, John Wiley & Sons, Ltd., vol. 26(9), pages 1132-1145, September.
    9. Laia Maynou & Marc Saez & Jordi Bacaria & Guillem Lopez-Casasnovas, 2015. "Health inequalities in the European Union: an empirical analysis of the dynamics of regional differences," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(5), pages 543-559, June.
    10. Makdissi, Paul & Yazbeck, Myra, 2014. "Measuring socioeconomic health inequalities in presence of multiple categorical information," Journal of Health Economics, Elsevier, vol. 34(C), pages 84-95.
    11. Allanson, Paul, 2010. "Longitudinal analysis of income-related health inequality: welfare foundations and alternative measures," SIRE Discussion Papers 2010-71, Scottish Institute for Research in Economics (SIRE).
    12. H. Eme Ichoku & William Fonta & Michael Thiede, 2011. "Socioeconomic gradients in self-rated health: a developing country case study of Enugu State, Nigeria," Economic Change and Restructuring, Springer, vol. 44(3), pages 179-202, August.
    13. Makdissi, Paul & Yazbeck, Myra, 2016. "Avoiding blindness to health status in health achievement and health inequality measurement," Social Science & Medicine, Elsevier, vol. 171(C), pages 39-47.
    14. Hurley, Jeremiah & Mentzakis, Emmanouil & Walli-Attaei, Marjan, 2020. "Inequality aversion in income, health, and income-related health," Journal of Health Economics, Elsevier, vol. 70(C).
    15. Heckley, Gawain A. & Gerdtham, Ulf-G. & Kjellsson, Gustav, 2014. "A New Approach to Decomposition of a Bivariate Rank Dependent Index Using Recentered Influence Function Regression," Working Papers 2014:36, Lund University, Department of Economics, revised 01 Apr 2015.
    16. Erreygers, Guido, 2009. "Can a single indicator measure both attainment and shortfall inequality?," Journal of Health Economics, Elsevier, vol. 28(4), pages 885-893, July.
    17. Kristof Bosmans, 2016. "Consistent Comparisons of Attainment and Shortfall Inequality: A Critical Examination," Health Economics, John Wiley & Sons, Ltd., vol. 25(11), pages 1425-1432, November.
    18. Lasso de la Vega, Casilda & Aristondo, Oihana, 2012. "Proposing indicators to measure achievement and shortfall inequality consistently," Journal of Health Economics, Elsevier, vol. 31(4), pages 578-583.
    19. Carrieri, Vincenzo & Wuebker, Ansgar, 2013. "Assessing inequalities in preventive care use in Europe," Health Policy, Elsevier, vol. 113(3), pages 247-257.
    20. Costa-Font, Joan & Hernández-Quevedo, Cristina, 2012. "Measuring inequalities in health: What do we know? What do we need to know?," Health Policy, Elsevier, vol. 106(2), pages 195-206.

    More about this item

    Keywords

    Socioeconomic inequality in health; Income inequality; Extended concentration index; S-Gini index; Distributional preferences;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:lunewp:2019_007. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Edgerton). General contact details of provider: http://edirc.repec.org/data/delunse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.