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The Income Unit And The Anatomy Of Income Distribution

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  • Sheldon Danziger
  • Michael K. Taussing

Abstract

This paper focuses on a neglected aspect of the treatment of the income unit in the construction of size distributions of income. If the size distribution is to be an indicator of the distribution of economic welfare, and if the economic welfare of each individual in society is to count equally, then conventional distributions are inconsistent with individualistic welfare functions. We estimate size distributions with each person's welfare weighted equally, and contrast these results with those weighting each household unit's welfare equally. The choice of weights is shown to affect both the level and the trend in income inequality.

Suggested Citation

  • Sheldon Danziger & Michael K. Taussing, 1979. "The Income Unit And The Anatomy Of Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(4), pages 365-375, December.
    • Handle: RePEc:bla:revinw:v:25:y:1979:i:4:p:365-375
    DOI: 10.1111/j.1475-4991.1979.tb00113.x
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    Cited by:

    1. Justin Van de Ven & Nicolas Herault, 2019. "The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015," National Institute of Economic and Social Research (NIESR) Discussion Papers 510, National Institute of Economic and Social Research.
    2. Garry F. Barrett & Thomas F. Crossley & Christopher Worswick, 2000. "Consumption and Income Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 76(233), pages 116-138, June.
    3. repec:cte:werepe:2909 is not listed on IDEAS
    4. Roberto A. De Santis, 2001. "The 1990 Trade Liberalisation Policy of Turkey: An Applied General Equilibrium Assessment," International Economic Journal, Taylor & Francis Journals, vol. 15(2), pages 115-132, June.
    5. Dean R. Hyslop & David C. Maré, 2003. "Understanding New Zealand's Changing Income Distribution 1983-98: A Semiparametric Analysis," Working Papers 03_16, Motu Economic and Public Policy Research.
    6. Barr, Nicholas, 1992. "Economic theory and the welfare state : a survey and interpretation," LSE Research Online Documents on Economics 279, London School of Economics and Political Science, LSE Library.
    7. Robert I. Lerman & Shlomo Yitzhaki, 1994. "Effect of Marginal Changes in Income Sources On U.S. Income Inequality," Public Finance Review, , vol. 22(4), pages 403-417, October.
    8. Robert Plotnick, 1985. "A Comparison of Measures of Horizontal Inequity," NBER Chapters, in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 239-268, National Bureau of Economic Research, Inc.
    9. McKinley L. Blackburn & David E. Bloom, 1993. "The Distribution of Family Income: Measuring and Explaining Changes in the 1980s for Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 233-266, National Bureau of Economic Research, Inc.
    10. Javier Ruiz-Castillo, 1995. "Income distribution and social welfare: a review essay," Investigaciones Economicas, Fundación SEPI, vol. 19(1), pages 3-34, January.
    11. Sheldon Danziger & Markus Jäntti, 1999. "Income Poverty in Advanced Countries," LIS Working papers 193, LIS Cross-National Data Center in Luxembourg.
    12. Viebrok, Holger & Himmelreicher, Ralf K., 2001. "Verteilungspolitische Aspekte vermehrter privater Altersvorsorge," Working papers of the ZeS 17/2001, University of Bremen, Centre for Social Policy Research (ZeS).
    13. repec:cte:werepe:2907 is not listed on IDEAS
    14. Río, Coral del, 1997. "An inequality decomposition method which minimizes equivalence scales contamination problems," UC3M Working papers. Economics 6038, Universidad Carlos III de Madrid. Departamento de Economía.
    15. John Creedy & Rosanna Scutella, 2004. "The Role of the Unit of Analysis in Tax Policy Return Evaluations of Inequality and Social Welfare," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 7(1), pages 89-108, March.
    16. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    17. Ron Crawford & Grant Johnston, 2004. "Household incomes in New Zealand: The impact of the market, taxes and government spending, 1987/88–1997/98," Treasury Working Paper Series 04/20, New Zealand Treasury.

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