A normative and statistical approach to measuring classical horizontal inequity

Jean-Yves Duclos and Peter J. Lambert

Canadian Journal of Economics, 2000, vol. 33, issue 1, 87-113

Abstract: A local measure of classical horizontal inequity (HI) in an income tax or tax-benefit system is proposed and aggregated into a global index. This index expresses the revenue gain per capita that would come from eliminating HI welfare-neutrally, and also reveals the loss of vertical performance, in terms of the Blackorby and Donaldson (1984) progressivity index, caused by the presence of HI. Non-parametric estimation procedures that can be used to tackle the "identification problem" are delineated. An application to the Canadian tax-benefit system between 1981 and 1994 reveals the changing profile of local HI, its sources, and its aggregate significance.

JEL-codes: C14 D31 D63 H23 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (51)

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