Intermediate inequality and welfare.

We introduce a new centrist or intermediate inequality concept, between the usual relative and absolute notions, which is shown to be a variant of the α-ray invariant inequality measures in Pfingsten and Seidl (1997). We say that distributions x and y have the same (x, π)-inequality if the total income difference between them is allocated among the individuals as follows: 100π% preserving income shares in x, and 100(1−π)% in equal absolute amounts. This notion can be made as operational as current standard methods in Shorrocks (1983).

Intermediate inequality and welfare

The original publication is available at www.springerlink.comWe introduce a new centrist or intermediate inequality concept, between the usual relative and absolute notions, which is shown to be a variant of the α-ray invariant inequality measures in Pfingsten and Seidl (1997). We say that distributions x and y have the same (x, π)-inequality if the total income difference between them is allocated among the individuals as follows: 100π% preserving income shares in x, and 100(1−π)% in equal absolute amounts. This notion can be made as operational as current standard methods in Shorrocks (1983).Publicad

Tax Progressivity and Social Welfare with a Continuum of Inequality Views

If public policies should aim at promoting social welfare, then tax progressivity/regressivity should be considered in terms of its impact on social welfare, rather than as an end in itself. Whether a tax is progressive or regressive and how much it affects social welfare depends on how a neutral tax, a tax neither progressive nor regressive, is defined. This, in turn, depends on the inequality view taken, that is, on what kind of transformation of an income distribution is considered not to change the level of inequality. Kakwani and Son (Journal of Economic Inequality, 2021) developed a social welfare-based framework, which enables one to decompose the total welfare loss associated with a tax into elements of which one is the welfare impact of tax progressivity/regressivity. While Kakwani and Son consider only the inequality views known as relative and absolute inequality, we provide a generalisation of the framework to accommodate all intermediate inequality views in the continuum between the two polar views. While the total welfare loss does not depend on inequality view, its composition does: for a progressive (regressive) tax, moving closer to the relative view reduces (increases) the importance of progressivity (regressivity) for the total welfare impact. Thus, the perception of the composition of a given tax-induced welfare loss varies with the inequality view taken. We apply the generalised framework to assess the impact on social welfare of the Croatian tax system, showing that it matters for such an assessment which inequality view is taken

Intermediate inequality and welfare : the case of Spain, 1980-81 to 1990-91

The 1990–91 household expenditures distribution in Spain dominates, in the relative ("rightist") Lorenz sense, the 1980–81 distribution, but the latter dominates the former in the absolute ("leftist") Lorenz sense. This situation constitutes a textbook case for intermediate or "centrist" notions of inequality and social welfare. This paper presents the first empirical application of this sort, using the intermediate inequality concept introduced in Del Río and Ruiz-Castillo (2000). The data reveal that there is a decrease in household expenditures inequality for a relatively small set of centrist attitudes.Financial help from Project PB96- 0118 of the Spanish DGES is gratefully acknowledgedPublicad

The Impact of Increased Import Competition from the People’s Republic of China on Income Inequality and Household Welfare in Viet Nam

This paper examines the surge of imports from the PRC to Viet Nam from 2000 to 2014 in order to evaluate the effects of increased exposure to trade with the PRC on income inequality and household welfare in Viet Nam. Using household level data from the Viet Nam Household Living Standard Survey and combining it with measures of trade exposure, we find that increased imports led to a fall in inequality at the provincial and district level. We distinguish between intermediate and final goods and find similar results. In order to better understand the relative gains and losses across income groups, we apply a quantile regression approach. Our results indicate that increased imports were more often positively correlated with household income for households located in the lower quantiles. In contrast, for households in the upper quantiles the correlation is either negative or less pronounced

Analyzing Economy Wide Effects of Trade Liberalisation on Vietnam using a Dynamic Computable General Equilibrium Model

Since its reform process in the late 1980s, Vietnam has emerged as a rapidly growing economy with growth rates surpassing its more developed ASEAN neighbours. This paper aims to consider the economy wide impacts of trade liberalisation on Vietnam. We approach this by way of multi-region, multi-good, dynamic growth computable general equilibrium (DCGE) model. We find that trade liberalisation has caused a large fall in wage inequality thus increasing the welfare of unskilled workers in Vietnam. There is also evidence of a shift away from agriculture towards low-tech and intermediate manufacturing sectors. Additionally, there are significant gains in terms of large physical and human capital accumulation.

Intermediate inequality and welfare : the case of Spain, 1980-81 to 1990-91

We introduce a new centrist or intermediate inequality concept, between the usual relative and absolute notions, which is shown to be a variant of the a-ray invariant inequality measures in Pfingsten and Seidl (1994). We say that distributions x and y have the same (x, n)-inequality if the total income difference between then is allocated among the individuals as follows: 1001t percent preserving income shares in x, and 100(1-1t) per cent in equal absolute amounts. This notion can be made as operational as current standard methods in Shorrocks (1983). In the first empirical application of centrist concepts in the literature, the methodology is applied to the comparison of 1980-81 and 1990-91 distributions of household expenditures in Spain

Democracy, inequality and the environment when citizens can mitigate privately or act collectively

We study the political economy of the environment in autocratic, weak and strong democracies when individuals can either mitigate the health consequences of domestic pollution privately or reduce pollution collectively through public policy. The setting is that of a small open economy in which incomes depend importantly on trade in dirty goods, where income inequality and the degree to which ordinary citizens exert voice in each dimension of the policy process distinguishes elites and ordinary citizens. The recognition that the health consequences of pollution can be dealt with privately at a cost adds an important dimension to the analysis of the political economy of environmental regulation, especially for an open economy. When private mitigation is feasible, inequality of incomes leads to an unequal distribution of the health burden of pollution (in accordance with the epidemiologic evidence), thus polarizing the interests of citizens in democracies and of ordinary citizens and elites in non-democratic regimes. Inequality in the willingness to bear the cost of private mitigation in turn interacts with the pollution costs and income benefits of trade in dirty goods to further polarize interests concerning both environmental stringency and the regulation of trade openness. In this context, we show how the eco-friendliness ranking of different political regimes varies with the cost of private mitigation and with the extent of income inequality, tending to converge when mitigation costs are high, and even producing a ranking reversal between democracies and autocracies, and between weak and strong democracies, when costs lie in an intermediate range.pollution, environmental regulation, private mitigation, income inequality, democracy, trade, welfare, collective choice, political economy

Democracy, Inequality and the Environment when Citizens can Mitigate Privately or Act Collectively

We study the political economy of the environment in autocratic, weak and strong democracies when individuals can either mitigate the health consequences of domestic pollution privately or reduce pollution collectively through public policy. The setting is that of a small open economy in which incomes depend importantly on trade in dirty goods, where income inequality and the degree to which ordinary citizens exert voice in each dimension of the policy process distinguishes elites and ordinary citizens. The recognition that the health consequences of pollution can be dealt with privately at a cost adds an important dimension to the analysis of the political economy of environmental regulation, especially for an open economy. When private mitigation is feasible, inequality of incomes leads to an unequal distribution of the health burden of pollution (in accordance with the epidemiologic evidence), thus polarizing the interests of citizens in democracies and of ordinary citizens and elites in non-democratic regimes. Inequality in the willingness to bear the cost of private mitigation in turn interacts with the pollution costs and income benefits of trade in dirty goods to further polarize interests concerning both environmental stringency and the regulation of trade openness. In this context, we show how the eco-friendliness ranking of different political regimes varies with the cost of private mitigation and with the extent of income inequality, tending to converge when mitigation costs are high, and even producing a ranking reversal between democracies and autocracies, and between weak and strong democracies, when costs lie in an intermediate range.pollution, environmental regulation, private mitigation, income inequality, democracy, trade, welfare, collective choice, political economy

Searching by questionaire for the meaning of income inequality

Amien and Cowell (1992) have recently performed an experimental test by questionnaire to investigate whether a sample of individuals corroborate the general consensus found in the literature about a number of axioms on the meaning of 'inequality'. They obtained some mixed results. In this article we report on a replica of the experiment with some novelties: we introudce the role of political attitudes toward income redistribution to clarify the interpretation of some results; the questionnaire is enlarged in an attempt to give more room to notions of inequality imtermediate between the relative and absolute polar cases; and we provide a systematic treatment of the degree of consistency exhibited by the respondents