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Individual welfare, social deprivation and income taxation

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  • Satya R. Chakravarty
  • Patrick Moyes

Abstract

In a homogeneous framework where individuals can only be distinguished on the basis of their incomes, we examine the incidence of taxation on the amount of deprivation felt in the society. We conceive deprivation in terms of utility or well-being rather than just in terms of income and we measure it by comparing the deprivation profiles arising in the different situations. We identify the restrictions to be imposed on the utility function which guarantee that a more progressive system of taxes always results in less social deprivation. We show that, in general, it is not possible to get an equivalence and realize a social improvement in terms of social deprivation by substituting a more progressive system of taxes for a less progressive one. Copyright Springer-Verlag Berlin Heidelberg 2003

Suggested Citation

  • Satya R. Chakravarty & Patrick Moyes, 2003. "Individual welfare, social deprivation and income taxation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(4), pages 843-869, June.
    • Handle: RePEc:spr:joecth:v:21:y:2003:i:4:p:843-869
    DOI: 10.1007/s00199-002-0276-9
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    Cited by:

    1. Alain Chateauneuf & Patrick Moyes, 2005. "Lorenz non-consistent welfare and inequality measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(2), pages 61-87, January.
    2. Satya Chakravarty, 2007. "A deprivation-based axiomatic characterization of the absolute Bonferroni index of inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(3), pages 339-351, December.
    3. Satya R. Chakravarty & Amita Majumder & Sonali Roy, 2007. "A Treatment Of Absolute Indices Of Polarization," The Japanese Economic Review, Japanese Economic Association, vol. 58(2), pages 273-293, June.
    4. Walter Bossert & Conchita D’Ambrosio, 2007. "Dynamic Measures of Individual Deprivation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 28(1), pages 77-88, January.
    5. Alain Chateauneuf & Patrick Moyes, 2002. "Measuring inequality without the Pigou-Dalton condition," Post-Print hal-00156475, HAL.
    6. Alidou Ouedraogo & Michel Boyer, 2012. "Firm Governance and Organizational Resiliency in a Crisis Context: A Case Study of a Small Research-based Venture Enterprise," Post-Print hal-01243447, HAL.
    7. Bich, Philippe & Chateauneuf, Alain & Ventura, Caroline, 2023. "Social tension order: A new approach to inequality reduction," Journal of Mathematical Economics, Elsevier, vol. 108(C).
    8. Félix Belzunce & Carolina Martínez-Riquelme & José M. Ruiz & Miguel A. Sordo, 2017. "On the Comparison of Relative Spacings with Applications," Methodology and Computing in Applied Probability, Springer, vol. 19(2), pages 357-376, June.
    9. Satya R. Chakravarty & Conchita D'Ambrosio & Pietro Muliere, 2003. "Target Shortfall Orderings and Indices," Discussion Papers of DIW Berlin 340, DIW Berlin, German Institute for Economic Research.
    10. Maite Blázquez Cuesta & Santiago Budría, 2014. "Deprivation and Subjective Well-Being: Evidence from Panel Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 655-682, December.
    11. Walter Bossert & Conchita D’Ambrosio, 2020. "Losing ground in the income hierarchy: relative deprivation revisited," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 1-12, March.
    12. Satya R. Chakravarty & Palash Sarkar, 2022. "Inequality minimising subsidy and taxation," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(1), pages 53-67, May.
    13. Bossert, Walter & D’Ambrosio, Conchita, 2014. "Proximity-sensitive individual deprivation measures," Economics Letters, Elsevier, vol. 122(2), pages 125-128.
    14. Satya R. Chakravarty, 2009. "Deprivation, Inequality And Welfare," The Japanese Economic Review, Japanese Economic Association, vol. 60(2), pages 172-190, June.
    15. Belzunce, Félix & Pinar, José F. & Ruiz, José M. & Sordo, Miguel A., 2013. "Comparison of concentration for several families of income distributions," Statistics & Probability Letters, Elsevier, vol. 83(4), pages 1036-1045.
    16. Masato Okamoto, 2022. "Lorenz and Polarization Orderings of the Double-Pareto Lognormal Distribution and Other Size Distributions," Sankhya B: The Indian Journal of Statistics, Springer;Indian Statistical Institute, vol. 84(2), pages 548-574, November.
    17. Conchita D’Ambrosio & Joachim Frick, 2007. "Income Satisfaction and Relative Deprivation: An Empirical Link," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 81(3), pages 497-519, May.
    18. Flaviana Palmisano, 2024. "Compassion and envy in distributional comparisons," Theory and Decision, Springer, vol. 96(1), pages 153-184, February.
    19. Patrick Moyes, 2007. "An extended Gini approach to inequality measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(3), pages 279-303, December.
    20. Labeaga, José M. & Molina, José Alberto & Navarro, María, 2011. "Deprivation using satisfaction measures in Spain: An evaluation of unemployment benefits," Journal of Policy Modeling, Elsevier, vol. 33(2), pages 287-310, March.
    21. Antonia Castaño-Martínez & Gema Pigueiras & Miguel A. Sordo, 2021. "On the Increasing Convex Order of Relative Spacings of Order Statistics," Mathematics, MDPI, vol. 9(6), pages 1-12, March.
    22. Labeaga, José M. & Molina, José Alberto & Navarro Paniagua, Maria, 2007. "Income Satisfaction and Deprivation in Spain," IZA Discussion Papers 2702, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Keywords and Phrases: Welfarism; Taxation; Progressivity; Deprivation; Individual welfare.; JEL Classification Numbers: D31; D63; H24.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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