To Each the Same and to Each His Own. A Proposal to Measure Responsibility-Sensitive Income Inequality

This paper deals with the question: How can one incorporate modern responsibility-catering egalitarianism into the economic theory on the measurement of income inequality? We first concisely describe what is meant by responsibility-sensitive egalitarianism and present a particular axiomatic expression of its main aspects, as advocated by Bossert and Fleurbaey [1996]. We defend that only inequality due to factors beyond the scope of one’s responsibility is ethically offensive. Traditional income inequality measurement, however, takes all inequality to be offensive. To measure offensive inequality separately we propose to construct a norm or reference income distribution based upon the axiomatic model to replace the perfectly equal income distribution which is used as norm by all common inequality measures. We then defend the use of a particular measure of distributional change to determine the degree of offensive inequality. Finally, we demonstrate how the method works by applying it to Belgian income data.