The atlas of inequality aversion: Theory and empirical evidence from the Luxembourg Income Study Database

Arbeitspapier

In the distributive analysis, the constant relative inequality aversion utility function is a standard tool for ethical judgements of income distributions. The sole parameter ε of this function expresses a society's aversion to inequality. However, the profession has not committed to the range of ε. This paper aims to estimate the parameter ε of the constant relative inequality aversion utility function using datasets available from the Luxembourg Income Study Database. We utilise the method of estimating ε assuming incomes obey the generalised beta distribution of the second kind. The estimator of ε is derived from the mathematical condition of the existence of the social welfare function. We elaborate an 'atlas' of 388 estimates of ε for 55 countries across time. We also verify two hypotheses: 1) The richer the country, the greater the societal inequality aversion; 2) The greater (lower) the inequality aversion, the lower (greater) income inequality. Our data do not confirm the 1st hypothesis. For verifying the 2nd hypothesis, we use the inequality-development relationship augmented by inequality aversion. The 2nd hypothesis is unfalsified in about 90% of country-year cases.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: LIS Working Paper Series ; No. 826

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Econometric and Statistical Methods and Methodology: General ; Distribution: General ; Welfare Economics: General ; Welfare, Well-Being, and Poverty: General ; Economic Development: Human Resources; Human Development; Income Distribution; Migration
• Thema: inequality aversion ; Atkinson Index ; income distribution ; inequality ; utility function

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kot, Stanisław Maciej ; Paradowski, Piotr R.
• Ereignis: Veröffentlichung
• (wer): Luxembourg Income Study (LIS)
• (wo): Luxembourg
• (wann): 2022

Weitere Informationen

• Handle: http://hdl.handle.net/10419/267026
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ