Distributional orderings and the transfer principle : a re-examination

Abstract

We examine the specification and interpretation of the transfer principle in analysing income distributions. The early work by Pigou and Dalton on this topic left open the possibility of a variety of specifications and interpretation of the principle. The modern development of the theory since Atkinson (1970) and Kolm (1969) has focused on one particular implementation. We demonstrate that this may be inappropriate in the light of the way that people appear to perceive inequalities in income distribition