Do redistributive schemes reduce inequality between individuals?

Redistribution schemes (taxes or benefits) are generally performed at the household level. The issue is to know whether intra-household inequality magnifies or hampers the redistributive effect of the transfers, when the policy-maker focuses on the inequality at the individual level. Depending on the type of the transfer, three properties capturing the idea that the more wealthy the household is, the more unequally it behaves, have been shown to matter. In the moving away approach, the deviation with the equal split make a difference, in the star-shaped approach, the average share counts while the marginal share is relevant for concavity. We complete the analysis by showing how these properties of the intra-household allocation may be recovered through a bargaining model of the household. Then, the DARA and DRRA properties of the utility function emerge as the key conditions for the recovery.Inequality, Intra-household Allocation, Household bargaining, Lorenz curve, Taxation schemes.

Poverty orderings and intra-household inequality: The lost axiom

We investigate under which conditions it is possible to infer the evolution of poverty at the individual level from the knowledge of poverty among households. Poverty measurement is approached by the poverty orderings introduced by Foster and Shorrocks (1988). The analysis is based on a reduced form of household bargaining (Peluso and Trannoy 2007) and provides results in terms of preservation of poverty orderings. We point out the main analogies and differences between inequality and poverty assessment, expressing them in terms of empirically testable conditions. In particular, knowing the change in poverty at the household level is not sufficient to deduce a similar change in poverty at the individual level. We need to know the change in the household income distributions far beyond their poverty line. The focus axiom does not hold in this context.Poverty orderings, intra-household allocation, concavity, focus axiom.

American baby-losers? Robust indirect comparison of affluence across generations

We propose an indirect and robust method to detect a change in the concentration of economic affluence defined as an aggregate measure of the command over lifetime resources when the full stream of income receipts along the life cycle is unknown and only consumption surveys are available. The method relies on a new stochastic ordering, the “Generalized Top Lorenz” and the key-property of concavity of consumption with respect to wealth. Our application on US data for the period 1980-2002 shows a moderate increase in economic affluence and points out the di¢ cult start in life of people belonging to the "Baby loser generation" (people born in the sixties).concavity, wealth, dominance orderings, consumption.

From household to individual’s welfare: does the Lorenz criteria still hold? Theory and Evidence from French Data

Consider an income distribution among households of the same size in which individuals, equally needy from the point of view of an ethical observer, are treated unfairly within the household. In the first part of the paper, we look for necessary and sufficient conditions under which the Generalized Lorenz test is preserved from household to individual level. We find that the concavity of the expenditures devoted to public goods relatively to household income is a necessary condition. This condition also becomes sufficient, if joined with the concavity of the expenditure devoted to private goods of the dominated individual. The results are extended to the case of heterogeneous populations, when more complex Lorenz comparisons are involved. In the second part of the paper, we propose a new method to identify the intra-family sharing rule. The double concavity condition is then non-parametrically tested on French households.Lorenz comparisons, intra-household inequality, concavity

Equity in the City: On Measuring Urban (Ine)Quality of Life

We merge contributions from the New Urban Economics and inequality measurement to assess quality of life (QOL) in a given city. We take the point of view of a city planner in favor of an even accessibility to amenities within the city. Instead of the average value of amenities computed in the Roback (1982) QOL index, our index captures the value of its multidimensional "certainty equivalent". We apply this methodology to derive a QOL index for the city of Milan.Urban quality of life, amenities, hedonic prices, inequality index, just city.

Inference for the neighborhood inequality index

The neighborhood inequality (NI) index measures aspects of spatial inequality in the distribution of incomes within a city. The NI index is a population average of the normalized income gap between each individual's income (observed at a given location in the city) and the incomes of the neighbors located within a certain distance range. The approach overcomes the Modiable Areal Units Problem affecting local inequality measures. This paper provides minimum bounds for the NI index standard error and shows that unbiased estimators can be identied under fairly common hypothesis in spatial statistics. Results from a Monte Carlo study support the relevance of the approximations. Rich income data are then used to infer about trends of neighborhood inequality in Chicago, IL over the last 35 years

Majority Voting in Multidimensional Policy Spaces: Kramer-Shepsle versus Stackelberg

We study majority voting over a bidimensional policy space when the voters' type space is either uni- or bidimensional. We show that a Condorcet winner fails to generically exist even with a unidimensional type space. We then study two voting procedures widely used in the literature. The Stackelberg (ST) procedure assumes that votes are taken one dimension at a time according to an exogenously specified sequence. The Kramer-Shepsle (KS) procedure also assumes that votes are taken separately on each dimension, but not in a sequential way. A vector of policies is a Kramer-Shepsle equilibrium if each component coincides with the majority choice on this dimension given the other components of the vector. We study the existence and uniqueness of the ST and KS equilibria, and we compare them, looking e.g. at the impact of the ordering of votes for ST and identifying circumstances under which ST and KS equilibria coincide. In the process, we state explicitly the assumptions on the utility function that are needed for these equilibria to be well behaved. We especially stress the importance of single crossing conditions, and we identify two variants of these assumptions: a marginal version that is imposed on all policy dimensions separately, and a joint version whose definition involves both policy dimensions.

Third-Degree Stochastic Dominance and the von-Neumann-Morgenstern Independence Property

This paper is an investigation of the third-degree stochastic dominance order which has been introduced in the context of risk analysis and is now receiving an increased attention in the area of inequality measurement. After observing that this partial order fails to satisfy the von Neumann-Morgenstern property in the space of random variables, we introduce strong and local third-degree stochastic dominance. We motivate these two new binary relations and o\ufb00er a complete and simple characterizations in the spirit of the Lorenz characterization of the second-degree stochastic order. The paper compares our results with the closest literature. JEL Classification Numbers: D31, D63