IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/28068.html
   My bibliography  Save this paper

Duclos-Jalbert-Araar decomposition of redistributive effect: implementation issues

Author

Listed:
  • Ivica, Urban

Abstract

When there is a large number of pre-fiscal income equals in the sample, the redistributive effects based on the Gini index may be inappropriately estimated. Due to its roots in the Gini framework, the problem also appears in the application of the Duclos, Jalbert and Araar (2003) (DJA) decomposition of redistributive effects into vertical, classical horizontal inequity and reranking effects. This paper explains how the DJA implementation procedure must be adapted to produce correct estimates of different effects. The procedure is first illustrated on the 12-units hypothetical population and then applied to real data for the Croatian fiscal subsystem comprised of social security contributions, personal income tax, public pensions and cash social benefits.

Suggested Citation

  • Ivica, Urban, 2011. "Duclos-Jalbert-Araar decomposition of redistributive effect: implementation issues," MPRA Paper 28068, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28068
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/28068/1/MPRA_paper_28068.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/31993/1/MPRA_paper_31993.pdf
    File Function: revised version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/31993/2/DJA-prefiscalequals-110702.pdf
    File Function: revised version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/32841/1/MPRA_paper_32841.pdf
    File Function: revised version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/38588/1/MPRA_paper_38588.pdf
    File Function: revised version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/58826/1/MPRA_paper_38588.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Duclos, Jean-Yves & Jalbert, Vincent & Araar, Abdelkrim, 2000. "Classical Horizontal Inequity and Reranking: an Integrated Approach," Cahiers de recherche 0002, Université Laval - Département d'économique.
    2. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    3. Bilger, Marcel, 2008. "Progressivity, horizontal inequality and reranking caused by health system financing: A decomposition analysis for Switzerland," Journal of Health Economics, Elsevier, vol. 27(6), pages 1582-1593, December.
    4. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mitja Čok & Ivica Urban & Miroslav Verbič, 2013. "Income Redistribution through Taxes and Social Benefits: The Case of Slovenia and Croatia," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(5), pages 667-686.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ebl:ecbull:v:3:y:2003:i:19:p:1-16 is not listed on IDEAS
    2. Cavagnero, Eleonora & Bilger, Marcel, 2010. "Equity during an economic crisis: Financing of the Argentine health system," Journal of Health Economics, Elsevier, vol. 29(4), pages 479-488, July.
    3. Ivica Urban, 2013. "Implementation Issues in the Duclos–Jalbert–Araar Decomposition of Redistributive Effect," Public Finance Review, , vol. 41(1), pages 121-143, January.
    4. Junyi Zhu, 2014. "Bracket Creep Revisited - with and without r > g: Evidence from Germany," Journal of Income Distribution, Ad libros publications inc., vol. 23(3), pages 106-158, November.
    5. Jean-Yves Duclos & Peter Lambert, "undated". "A Normative Approach to Measuring Classical Horizontal Inequity," Discussion Papers 97/3, Department of Economics, University of York.
    6. Ivica Urban, 2009. "Kakwani decomposition of redistributive effect: Origins, critics and upgrades," Working Papers 148, ECINEQ, Society for the Study of Economic Inequality.
    7. Duclos, Jean-Yves & Tabi, Martin, 1999. "Inégalité et redistribution du revenu, avec une application au Canada," L'Actualité Economique, Société Canadienne de Science Economique, vol. 75(1), pages 95-122, mars-juin.
    8. Jean-Yves Duclos & Abdelkrim Araar, 2003. "An Atkinson-Gini family of social evaluation functions," Economics Bulletin, AccessEcon, vol. 3(19), pages 1-16.
    9. Juan Gabriel Rodríguez & Rafael Salas & Irene Perrote, 2005. "Partial Horizontal Inequity Orderings: A Non‐parametric Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(3), pages 347-368, June.
    10. Duclos, Jean-Yves & Jalbert, Vincent & Araar, Abdelkrim, 2000. "Classical Horizontal Inequity and Reranking: an Integrated Approach," Cahiers de recherche 0002, Université Laval - Département d'économique.
    11. Stefano Boscolo, 2020. "On the Horizontal Inequity Effect of the Erosion of the PIT Base: The Case of Italy," Department of Economics 0176, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    12. Ivica Urban, 2014. "Contributions of taxes and benefits to vertical and horizontal effects," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(3), pages 619-645, March.
    13. O'Neill, D. & Van Kerm P., 2003. "A New Approach for Analysing Income Convergence across Countries," Economics Department Working Paper Series n1261003, Department of Economics, National University of Ireland - Maynooth.
    14. Peter Lambert & Thor Thoresen & Runa Nesbakken, 2010. "On the Meaning and Measurement of Redistribution in Cross-Country Comparisons," LIS Working papers 532, LIS Cross-National Data Center in Luxembourg.
    15. Alan J. Auerbach & Kevin A. Hassett, 2002. "A New Measure of Horizontal Equity," American Economic Review, American Economic Association, vol. 92(4), pages 1116-1125, September.
    16. Duclos, Jean-Yves, 1998. "Social evaluation functions, economic isolation and the Suits index of progressivity," Journal of Public Economics, Elsevier, vol. 69(1), pages 103-121, July.
    17. Lars Osberg, 2017. "On the Limitations of Some Current Usages of the Gini Index," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(3), pages 574-584, September.
    18. Thor O. Thoresen & Zhiyang Jia & Peter J. Lambert, 2013. "Distributional benchmarking in tax policy evaluations," Discussion Papers 765, Statistics Norway, Research Department.
    19. Valentino Dardoni & Peter Lambert,, 2000. "Progressivity comparisons," IFS Working Papers W00/18, Institute for Fiscal Studies.
    20. Wagstaff, Adam, 2005. "Decomposing changes in income inequality into vertical and horizontal redistribution and reranking, withapplications to China and Vietnam," Policy Research Working Paper Series 3559, The World Bank.
    21. Luis José Imedio Olmedo & Elena Bárcena Martín, 2002. "Códigos impositivos, desigualdad y bienestar," Hacienda Pública Española / Review of Public Economics, IEF, vol. 160(1), pages 29-46, march.

    More about this item

    Keywords

    redistributive effect; vertical equity; horizontal equity; pre-fiscal equals;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:28068. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.