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Lorenz dominance and non-welfaristic redistribution

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  • LUTTENS, Roland Iwan
  • VAN DE GAER, Dirk

Abstract

Given the decision to implement a non-welfaristic redistribution scheme, we analyze which mechanisms are favored by traditional Lorenz dominance and poverty dominance adherents. We show that for large classes of income functions Lorenz dominance results can be found in the comparison of two egalitarian equivalent mechanisms. Comparisons of different conditionally egalitarian mechanisms only yield poverty dominance results. Finally, certain egalitarian equivalent mechanisms can Lorenz dominate all conditionally egalitarian mechanisms. Our analysis stresses the need for accurate empirical estimates of the pre-tax income function and of the distributions of responsibility and compensation characteristics.
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Suggested Citation

  • LUTTENS, Roland Iwan & VAN DE GAER, Dirk, 2007. "Lorenz dominance and non-welfaristic redistribution," LIDAM Reprints CORE 1950, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1950
    DOI: 10.1007/s00355-006-0164-5
    Note: In : Social Choice Welfare, 28, 281-302, 2007
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    References listed on IDEAS

    as
    1. Bossert W., 1996. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 31(1), pages 51-51, February.
    2. Elisha A. Pazner & David Schmeidler, 1978. "Egalitarian Equivalent Allocations: A New Concept of Economic Equity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(4), pages 671-687.
    3. Anthony F. Shorrocks & James E. Foster, 1987. "Transfer Sensitive Inequality Measures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 485-497.
    4. Dirk Van de gaer & Marc Fleurbaey & Walter Bossert, 1999. "Responsibility, talent, and compensation: A second-best analysis," Review of Economic Design, Springer;Society for Economic Design, vol. 4(1), pages 35-55.
    5. Schokkaert, Erik & Van de gaer, Dirk & Vandenbroucke, Frank & Luttens, Roland Iwan, 2004. "Responsibility sensitive egalitarianism and optimal linear income taxation," Mathematical Social Sciences, Elsevier, vol. 48(2), pages 151-182, September.
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    Cited by:

    1. Fleurbaey, Marc & Schokkaert, Erik, 2009. "Unfair inequalities in health and health care," Journal of Health Economics, Elsevier, vol. 28(1), pages 73-90, January.
    2. Dirk Van de gaer & Xavier Ramos, 2020. "Measurement of inequality of opportunity based on counterfactuals," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(3), pages 595-627, October.
    3. Schokkaert, Erik & Van de Voorde, Carine, 2009. "Direct versus indirect standardization in risk adjustment," Journal of Health Economics, Elsevier, vol. 28(2), pages 361-374, March.
    4. X. Ramos & D. Van De Gaer, 2012. "Empirical Approaches to Inequality of Opportunity: Principles, Measures, and Evidence," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/792, Ghent University, Faculty of Economics and Business Administration.

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