Does less inequality among households mean less inequality among individuals?

Eugenio Peluso (eugenio.peluso@eco.u-cergy.fr) and Alain Trannoy

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: Consider an income distribution among households of the same size in which individuals, equally needy from the point of view of an ethical observer, are treated unfairly. Individuals are split into two types, the dominant and the dominated. We look for conditions under which welfare and inequality quasi-orders established at the household level still hold at the individual one. A necessary and sufficient condition for the Generalized Lorenz test is that the income of dominated individuals is a concave function of the household income: individuals of poor households have to stand more together than individuals of rich households. This property also proves to be crucial for the preservation of the Relative and Absolute Lorenz criteria, when the more egalitarian distribution is the poorest. Extensions to individuals heterogeneous in needs and more than two types are also provided.

Keywords: Lorenz dominance; Intra-household inequality; concavity; sharing rule (search for similar items in EconPapers)
JEL-codes: D13 D31 D63 (search for similar items in EconPapers)
Date: 2004-07
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Does less inequality among households mean less inequality among individuals? (2007)
Working Paper: Does less inequality among households mean less inequality among individuals ? (2004)
Working Paper: Does Less Inequality among Households Mean Less Inequality among Individuals? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:432

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