Analyzing the impact of indirect tax reforms on rank-dependent social welfare functions: a positional dominance approach

A new approach is developed to identify marginal tax reforms for pairs of commodities and to test for the robustness of their impacts on Yaari’s dual social welfare functions. The rank-dependent social evaluation approach gives rise to a new device, the s-concentration curve, which is a generalization of the standard concentration curve. The s-concentration curves are provided for every order of positional dominance and an illustration is performed using Canadian data. We thank Jean-Yves Duclos, Peter Lambert, and an anonymous referee for insightful comments and suggestions. This paper was funded through the Social Science and Humanities Research Council of the Government of Canada and the Fonds Québécois de la Recherche sur la Société et la Culture of the Government of Quebec.