The Measurement of Horizontal Inequality

Daniel T Slesnick

The Review of Economics and Statistics, 1989, vol. 71, issue 3, 481-90

Abstract: An alternative approach to the measurement of horizontal inequality is developed. This measure of inequality is based on an explicit social welfare function which is formulated so as to be consistent with the basic principles of social choice. The arguments of the social welfare function are welfare functions that depend on prices, total expenditure and the demographic composition of the household. The level of horizontal inequality is defined to be the difference between the level of social welfare attained at a perfect horizontally egalitarian distribution of welfare and the level of social welfare attained at the existing distribution of individual welfare. The level of horizontal inequality induced by the introduction of commodity taxes is evaluated for the United States over the period 1947-85. Copyright 1989 by MIT Press.

Date: 1989
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