Does less inequality among households mean less inequality among individuals? |
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Authors: | Eugenio Peluso Alain Trannoy |
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Institution: | a THEMA-Université de Cergy-Pontoise, 95011 Cergy-Pontoise, France b Dipartimento di Scienze Economiche, Università degli Studi di Verona, Via dell’ Università 4, 37129 Verona, Italy c EHESS, GREQAM-IDEP, 2 rue de la Charité, 13002, Marseille, France |
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Abstract: | Consider an income distribution among households of the same size in which individuals, equally needy from the point of view of an ethical observer, are treated unfairly. Individuals are split into two types, those who receive more than one half of the family budget and those who receive less than one half. We look for conditions under which welfare and inequality quasi-orders established at the household level still hold at the individual one. A necessary and sufficient condition for the Generalized Lorenz test is that the income of dominated individuals is a concave function of the household income: individuals of poor households have to stand more together than individuals of rich households. This property also proves to be crucial for the preservation of the Relative and Absolute Lorenz criteria, when the more egalitarian distribution is the poorest. Extensions to individuals heterogeneous in needs and more than two types are also provided. |
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Keywords: | D13 D63 D31 |
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