Redistribution, horizontal inequity and reranking: how to measure them properly
The decomposition of the redistributive effect of an income tax into vertical, horizontal and reranking contributions according to the model of Aronson, Johnson and Lambert (1994), henceforth AJL, is revisited. When close equals groups are used, rather than the exact equals groups upon which the model is predicated, problems arise. A new measurement system is proposed, in which three distinct forms of reranking are disentangled and the vertical and horizontal contributions are redefined. Other approaches to measuring equity in tax systems are set in context. Findings are applied to Croatian data, and recommendations for users of the AJL methodology are given.
|Date of creation:||01 Jul 2005|
|Contact details of provider:|| Postal: 1285 University of Oregon, 435 PLC, Eugene, OR 97403-1285|
Phone: (541) 346-8845
Fax: (541) 346-1243
Web page: http://economics.uoregon.edu/
More information through EDIRC
References listed on IDEAS
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.:
- Peter J. Lambert & Andre' Decoster, 2005.
"The Gini coefficient reveals more,"
Metron - International Journal of Statistics,
Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 373-400.
- Peter J. Lambert & Andre Decoster, 2004. "The Gini Coefficient Reveals More," University of Oregon Economics Department Working Papers 2004-18, University of Oregon Economics Department, revised 05 Dec 2004.
- Peter J. Lambert & André Decoster, 2005. "The Gini Coefficient Reveals More," Working Papers Department of Economics ces0508, KU Leuven, Faculty of Economics and Business, Department of Economics.
- van de Ven, Justin & Creedy, John & Lambert, Peter J, 2001. " Close Equals and Calculation of the Vertical, Horizontal and Reranking Effects of Taxation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(3), pages 381-394, July.
- Creedy, J. & Lambert, P.J. & van de Ven, J., 2001. "Close Equals and Calculation of the Vertical, Horizontal and Reranking Effects of Taxation," Department of Economics - Working Papers Series 781, The University of Melbourne.
- Jin Kwon Hyun & Byung-In Lim, 2005. "Redistributive effect of Korea's income tax: equity decomposition," Applied Economics Letters, Taylor & Francis Journals, vol. 12(3), pages 195-198.
- Jenkins, Stephen P., 1988. "Empirical measurement of horizontal inequity," Journal of Public Economics, Elsevier, vol. 37(3), pages 305-329, December.
- Jenkins, S., 1988. "Empirical Measurement Of Horizontal Inequity," Papers 169, Australian National University - Department of Economics.
- Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-1227, September.
- Mitja Cok & Ivica Urban, 2007. "Distribution of Income and Taxes in Slovenia and Croatia," Post-Communist Economies, Taylor & Francis Journals, vol. 19(3), pages 299-316.
- Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
- Wagstaff, Adam & van Doorslaer, Eddy & van der Burg, Hattem & Calonge, Samuel & Christiansen, Terkel & Citoni, Guido & Gerdtham, Ulf-G. & Gerfin, Michael & Gross, Lorna & Hakinnen, Unto, 1999. "Redistributive effect, progressivity and differential tax treatment: Personal income taxes in twelve OECD countries," Journal of Public Economics, Elsevier, vol. 72(1), pages 73-98, April.
- Aronson, J Richard & Johnson, Paul & Lambert, Peter J, 1994. "Redistributive Effects and Unequal Income Tax Treatment," Economic Journal, Royal Economic Society, vol. 104(423), pages 262-270, March.
- Raúl Camarero & Octavio Herrero & Ignacio Zubiri, 1993. "La medición de la inequidad horizontal: teoría y una aplicación al caso de Vizcaya," Investigaciones Economicas, Fundación SEPI, vol. 17(2), pages 333-362, May.
- J. Richard Aronson & Peter J. Lambert & Donald R. Trippeer, 1999. "Estimates of the Changing Equity Characteristics of the U.S. Income Tax with International Conjectures," Public Finance Review, , vol. 27(2), pages 138-159, March.
- King, Mervyn A, 1983. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," Econometrica, Econometric Society, vol. 51(1), pages 99-115, January.
- Peter Lambert, & Xavier Ramos, 1995. "Vertical redistribution and horizontal inequity," IFS Working Papers W95/01, Institute for Fiscal Studies.
- Plotnick, Robert, 1981. "A Measure of Horizontal Inequity," The Review of Economics and Statistics, MIT Press, vol. 63(2), pages 283-288, May.
- Aronson, J. Richard & Lambert, Peter J., 1994. "Decomposing the Gini Coefficient to Reveal the Vertical, Horizontal, and Reranking Effects of Income Taxation," National Tax Journal, National Tax Association, vol. 47(2), pages 273-94, June.
- van Doorslaer, Eddy & Wagstaff, Adam & van der Burg, Hattem & Christiansen, Terkel & Citoni, Guido & Di Biase, Rita & Gerdtham, Ulf-G. & Gerfin, Mike & Gross, Lorna & Hakinnen, Unto, 1999. "The redistributive effect of health care finance in twelve OECD countries," Journal of Health Economics, Elsevier, vol. 18(3), pages 291-313, June.
- Stephen Jenkins & Peter Lambert, "undated". "Horizontal Inequity Measurement: A Basic Reassessment," Discussion Papers 96/21, Department of Economics, University of York.
- Aronson, J. Richard & Lambert, Peter J., 1994. "Decomposing the Gini Coefficient to Reveal the Vertical, Horizontal, and Reranking Effects of Income Taxation," National Tax Journal, National Tax Association, vol. 47(2), pages 273-294, June. Full references (including those not matched with items on IDEAS)