The entanglement of attitudes toward inequality: the theoretical background and measurement for the EU countries in 2021

Stanislaw Maciej Kot ()
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Stanislaw Maciej Kot: Gdansk University of Technology, Gdansk, Poland

No 74, GUT FME Working Paper Series A from Faculty of Management and Economics, Gdansk University of Technology

Abstract: This paper assumes two kinds of social planners who evaluate income distributions concerning social welfare, economic inequality and poverty. The first kind of social planner, SPe, comprises averters to income inequality as measured by the normative parameter e. The second kind of social planner, SPv, comprises averters to rank inequality as measured by the normative parameter v. As every member of society may play the role of a social planner, there could be as many levels of e and v as society members. It raises the question of which ranges of v and e values are ethically sensible when conducting empirical welfare studies. This paper proposes an answer to this question, introducing the concept of inequality-entangled SPv and SPe. If a randomly selected SPv had vi, one could automatically find ei of the inequality-entangled SPe, and vice versa. The inequality-entangled SPv and SPe evaluate inequality, social welfare and poverty consistently. This paper offers a method of eliciting the pairs (vi, ei), i=1,2,...,n from empirical income distributions. Moreover, a single pair (v*, e*) exists, representing all n pairs. This paper applies the inequality-entanglement methodological framework to assess social welfare, inequality and poverty for 27 European Union member countries in 2021.

Keywords: income distribution; social welfare; inequality; poverty; inequality aversion; European Union (search for similar items in EconPapers)
Date: 2025-04
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