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Social welfare, inequality, and poverty when needs differ

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  • Udo Ebert

Abstract

The paper examines income distributions of a finite population consisting of households which may differ with respect to needs. Since observed incomes are not directly comparable, income distributions have to be adjusted. Incomes are transformed to equivalent incomes interpreted as living standards and measured for a reference type, and the latter are supplemented by weights depending on needs. A general class of social welfare orderings (being based on adjusted rank-ordered income distributions) is characterized by a set of properties. Severe limitations for the form of the adjustment process are implied. The consequences for the measurement of inequality and poverty are demonstrated, and corresponding orderings are derived. Copyright Springer-Verlag 2004

Suggested Citation

  • Udo Ebert, 2004. "Social welfare, inequality, and poverty when needs differ," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 23(3), pages 415-448, December.
    • Handle: RePEc:spr:sochwe:v:23:y:2004:i:3:p:415-448
    DOI: 10.1007/s00355-003-0266-2
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    Citations

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    Cited by:

    1. Philipp Biermann, 2016. "How Fuel Poverty Affects Subjective Well-Being: Panel Evidence from Germany," Working Papers V-395-16, University of Oldenburg, Department of Economics, revised Oct 2016.
    2. Nicolas Gravel & Patrick Moyes, 2013. "Utilitarianism or welfarism: does it make a difference?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(2), pages 529-551, February.
    3. Udo Ebert & Heinz Welsch, 2009. "How Do Europeans Evaluate Income Distributions? An Assessment Based On Happiness Surveys," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 803-819, September.
    4. repec:bla:econom:v:72:y:2005:i:3:p:453-468 is not listed on IDEAS
    5. Wakker, Peter P. & Yang, Jingni, 2019. "A powerful tool for analyzing concave/convex utility and weighting functions," Journal of Economic Theory, Elsevier, vol. 181(C), pages 143-159.
    6. Udo Ebert, 2008. "Living Standard, Social Welfare, and the Redistribution of Income in a Heterogeneous Population," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(5), pages 873-889, October.
    7. Jean Baccelli & Georg Schollmeyer & Christoph Jansen, 2022. "Risk aversion over finite domains," Theory and Decision, Springer, vol. 93(2), pages 371-397, September.
    8. Giulio Principi & Peter P. Wakker & Ruodu Wang, 2023. "Antimonotonicity for Preference Axioms: The Natural Counterpart to Comonotonicity," Papers 2307.08542, arXiv.org.
    9. Udo Ebert, 2010. "Equity‐regarding poverty measures: differences in needs and the role of equivalence scales," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(1), pages 301-322, February.
    10. Udo Ebert, 2011. "The redistribution of income when needs differ," Working Papers V-331-11, University of Oldenburg, Department of Economics, revised Feb 2011.
    11. repec:old:wpaper:331 is not listed on IDEAS
    12. Heinz Welsch & Udo Ebert, 2004. "The Social Evaluation of Income Distribution: An Assessment Based on Happiness Surveys," LIS Working papers 381, LIS Cross-National Data Center in Luxembourg.
    13. Wakker, Peter P. & Yang, Jingni, 2021. "Concave/convex weighting and utility functions for risk: A new light on classical theorems," Insurance: Mathematics and Economics, Elsevier, vol. 100(C), pages 429-435.
    14. Kirsten Rohde, 2010. "The hyperbolic factor: A measure of time inconsistency," Journal of Risk and Uncertainty, Springer, vol. 41(2), pages 125-140, October.
    15. Luis José Imedio Olmedo & Encarnación Macarena Parrado Gallardo & María Dolores Sarrión Gavilán, 2005. "Horizontal equity, equal progression: an utilitarian approach," Hacienda Pública Española / Review of Public Economics, IEF, vol. 174(3), pages 87-115, September.
    16. repec:zbw:hohpro:331 is not listed on IDEAS

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