On the Inefficiency of Inequality

Maurice Schiff

No 1283, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A number of studies have examined the implications of preference interdependence. This paper models utility as depending on other people’s consumption levels and shows that welfare declines with inequality, equilibrium inequality is inefficient, and the optimal intervention leads to a more equal distribution.

Keywords: inequality; efficiency (search for similar items in EconPapers)
JEL-codes: H21 H23 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2004-09
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (1)

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Working Paper: On the inefficiency of inequality (2004)
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