Responsibility sensitive egalitarianism and optimal linear income taxation

Schokkaert, Erik; gaer, Dirk Van de; Vandenbroucke, Frank; Luttens, Roland Iwan

doi:10.1016/j.mathsocsci.2004.01.002

Cited by 39 publications

(34 citation statements)

References 14 publications

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“…The compensation and neutrality principles cannot be both satisfied when individuals have heterogeneous preferences [6,16,21]. That is why, Fleurbaey and Maniquet measure unfairness through two criteria, each one giving the priority to one principle and fulfilling only partially the second one.…”

Section: Introductionmentioning

confidence: 99%

Empirical welfare analysis: when preferences matter

Carpantier

Sapata

2015

Soc Choice Welf

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Fleurbaey and Maniquet have proposed the criteria of conditional equality and of egalitarian equivalence to assess the equity among individuals in an ordinal setting. Empirical applications are rare and only partially consistent with their framework. We propose a new empirical approach that relies on individual preferences, is consistent with the ordinal criteria and enables to compare them with the cardinal criteria. We estimate a utility function that incorporates individual heterogeneous preferences, obtain ordinal measures of well-being and apply conditional equality and egalitarian equivalence. We then propose two cardinal measures of well-being, that are comparable with the ordinal model, to compute Roemer's and Van de gaer's criteria. Finally we compare the characteristics of the worst-off displayed by each criterion. We apply this model to a sample of US micro data and obtain that about 18% of the worst-off are not common to all criteria.Keywords: Random Utility, Preference Heterogeneity, Welfare, Inequality of Opportunity, Labour Supply JEL Codes: C35, D31, D63, H24, H31, J22 * The authors thank the participants of the FUSL CEREC seminar in Brussels, of the 2011 AFSE meeting in Paris, the OPHI 2011 conference in Oxford and of the internal Social Welfare seminars at CORE (UCL). They are especially grateful to André Decoster, Francisco Ferreira, Marc Fleurbaey, François Maniquet, Kristian Orsini, Andreas Peichl, Xavier Ramos, Juan Gabriel Rodriguez, Erik Schokkaert and Dirk Van de Gaer for their helpful comments and suggestions. The usual disclaimers apply.

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Section: Introductionmentioning

confidence: 99%

Empirical welfare analysis: when preferences matter

Carpantier

Sapata

2015

Soc Choice Welf

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Section: Introductionmentioning

confidence: 99%

“…In an optimal income tax setting, fairness could require that differences in productive skill (endowment) be compensated for, but not differences in taste for working (ambition). 1 Schokkaert et al (2004) introduce such fairness considerations in different ways and calculate the corresponding optimal linear income tax, which turns out to be positive. Allowing for nonlinear tax schemes, results change drastically.…”

Section: Introductionmentioning

confidence: 99%

Is it Fair to ‘Make Work Pay’?

Luttens¹,

Ooghe²

2007

Economica

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We present a new fair allocation, coined a 'Pareto-efficient and Shared Resources Equivalent' allocation, which compensates for different productive skills, but not for different tastes for working. We illustrate the optimal second-best allocation in a discrete Stiglitz economy. The question of whether we should have regressive or progressive taxes for low earners crucially depends on whether the low-skilled have a strictly positive skill or zero skill. Our simulation results suggest that 'making work pay' policies can be optimal, according to our fairness criterion, but only in the unreasonable case in which all the unemployed are never willing to work.

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“…What is novel, is that the empirical rank correlations of welfare orderings based on these different measures, can now be interpreted as showing the sensitivity of welfare orderings to ethical choices about how to deal with preference heterogeneity. Moreover, the empirical nature of our paper complements results from similar exercises in Hodler (2009), Luttens and Ooghe (2007) or Schokkaert et al (2004), where the application of a proposed normative analysis in societies with heterogeneous preferences is confined to numerical simulations in highly stylized settings, and to Lockwood and Weinzierl (2012) who explicitly model the relative importance of ability and preferences in the observed variation in earnings in an extension of the standard optimal tax framework.…”

Section: Introductionmentioning

confidence: 73%