Social tension order: A new approach to inequality reduction

Philippe Bich (), Alain Chateauneuf and Caroline Ventura ()
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Philippe Bich: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
Caroline Ventura: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We introduce a new order on income distributions that we call "social tension" order, based on the concepts of absolute satisfaction and absolute deprivation, as introduced by Chakravarty (1997) (see also Chateauneuf and Moyes, 2006). Our order postulates that antagonist groups of individuals behave differently when comparing welfare: each "poor" individual compares herself with richer individuals, while each "rich" individual compares herself with poorer ones. We prove that reducing social tension corresponds to fair taxation and provide an explicit algorithm that allows for transitioning from a dominated distribution to a dominating one through a sequence of elementary transfers that respect our order. Additionally, we construct a new index from the "social tension" order, which may better capture the various sources of inequality compared to the Gini index. Lastly, we characterize those expected utility functions that respect our order.

Date: 2023-10
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Published in Journal of Mathematical Economics, 2023, 108, ⟨10.1016/j.jmateco.2023.102886⟩

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Journal Article: Social tension order: A new approach to inequality reduction (2023)
Working Paper: Social tension order: A new approach to inequality reduction (2023)
Working Paper: Social tension order: A new approach to inequality reduction (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-04353027

DOI: 10.1016/j.jmateco.2023.102886

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