Measuring Progressivity and Inequality
A general class of progressivity indices is proposed which is consistent with the well-developed theory of the measurement of inequality and social welfare. In particular, we show that the more progressive a tax system, the more equal the distribution of net income and the greater the progressivity index. For an additive social welfare function and a progressive tax system, the greater the degree of relative inequality aversion, the greater the progressivity index. We also discuss the link between inequality of gross income and tax progressivity. A by-product is the derivation of a general class of inequality measures that are invariant to equi-proportionate changes in incomes. We illustrate the analysis using the British tax and benefit system.
|Date of creation:||1995|
|Contact details of provider:|| Postal: Pavillon J.A. De Sève, Québec, Québec, G1K 7P4|
Phone: (418) 656-5122
Fax: (418) 656-2707
Web page: http://www.ecn.ulaval.ca
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- G.B. Hainsworth, 1964. "The Lorenz Curve As A General Tool Of Economic Analysis," The Economic Record, The Economic Society of Australia, vol. 40(91), pages 426-441, 09.
- Blackorby, Charles & Donaldson, David, 1978. "Measures of relative equality and their meaning in terms of social welfare," Journal of Economic Theory, Elsevier, vol. 18(1), pages 59-80, June.
- Charles Blackorby & David Donaldson, 1984. "Ethical Social Index Numbers and the Measurement of Effective Tax-Benefit Progressivity," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 683-694, November.
- 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.
- 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.
- Suits, Daniel B, 1977. "Measurement of Tax Progressivity," American Economic Review, American Economic Association, vol. 67(4), pages 747-752, September.
- Mehran, Farhad, 1976. "Linear Measures of Income Inequality," Econometrica, Econometric Society, vol. 44(4), pages 805-809, July.
- Kolm, Serge-Christophe, 1976. "Unequal inequalities. II," Journal of Economic Theory, Elsevier, vol. 13(1), pages 82-111, August.
- Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April.
- Jakobsson, Ulf, 1976. "On the measurement of the degree of progression," Journal of Public Economics, Elsevier, vol. 5(1-2), pages 161-168.
- Fellman, J, 1976. "The Effect of Transformations on Lorenz Curves," Econometrica, Econometric Society, vol. 44(4), pages 823-824, July.
- Duclos, Jean-Yves, 1995.
"Assessing the Performance of an Income Tax,"
Bulletin of Economic Research,
Wiley Blackwell, vol. 47(2), pages 115-126, April.
- R. A. Musgrave & Tun Thin, 1948. "Income Tax Progression, 1929-48," Journal of Political Economy, University of Chicago Press, vol. 56, pages 498-498.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
When requesting a correction, please mention this item's handle: RePEc:lvl:laeccr:9525. 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: (Manuel Paradis)
If references are entirely missing, you can add them using this form.